Leader of Canada's opposition Liberal Party quits

The head of Canada's opposition Liberals announced Monday that he will step down after leading the once-dominant party to one of its worst defeats, in last week's elections for Parliament.

Stephane Dion said he would stay on as leader until his successor is chosen by the party, which isn't expected before the Liberals' convention next May.

Deputy leader Michael Ignatieff and the party's foreign affairs spokesman, Bob Rae, a former Ontario premier, are expected to run for the leadership post. Both are more centrist than the left-leaning Dion.

Seeking to unseat the governing Conservatives, Dion campaigned on what proved an unpopular environmental tax during slowing economic times and the Liberals suffered a drubbing, dropping to 76 seats in Parliament from 95.

Prime Minister Stephen Harper's Conservative Party expanded its seats in winning re-election, although it again fell short of the 155-seat majority needed to rule without help from the opposition.

Still, it was a bitter defeat for the Liberals, which have held power for most of Canada's 141 years. The party won just over 26 percent of the votes, four points ahead of its worst-ever results in 1867.

"I've been a good campaigner. I spoke with conviction. We have a good platform," said Dion, who will likely become just the second Liberal leader to fail to become Canada's prime minister. The only other was Edward Blake, who led the party to defeat in 1882 and 1887 elections.

After the defeat, Liberal members had openly predicted that Dion would be forced to quit if he did not voluntarily resign.

Dion, 53, is a former professor from the French-speaking province of Quebec whose struggles to communicate in English became a major issue during the campaign. His English is awkward, and he frequently stumbles over words or mangles grammar.

A former environment minister, Dion won a surprise victory over Ignatieff and Rae in the Liberals' leadership contest in 2006, after making climate change his central issue.

But he found resistance when he moved the party further to the left by staking his leadership on a "Green Shift" tax plan that would introduce a carbon tax on all fossil fuels except gasoline.

He had little success selling the plan to Canadians and even members of his own party. The Conservatives targeted the plan in television and radio ads, saying it would drive up energy costs at a time of high energy prices. Dion said he would offset the higher prices by cutting income taxes.

"It is cemented in the mind-set of Canadians too much what I represent and what I have proposed according to the Conservative version of all this, and to try to change that would be a tremendous effort and a risk that I don't need to impose on my party," Dion said in explaining his resignation.

Dion said a lack of money meant his party couldn't counter Conservative attack ads. Former Liberal Prime Minister Jean Chretien passed a law abolishing union and corporate donations and set a 5,000 Canadian dollar limit. Harper has since dropped the maximum contribution to 1,100 Canadian dollars. The changes hurt the Liberals.

"In the door to door canvassing my colleagues, my friends, were told 'We don't like your leader,'" Dion said. "It was the Conservative propaganda. It's the way they saw me."