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The Progressive Conservatives posted a surprise victory last night in the Ontario by-election in Perth-Middlesex, taking the seat away from federal Liberals who had relied on vote-splitting to hold the constituency.

PC candidate Gary Schellenberger, a businessman, won the Ontario seat in a pitched battle with Liberal Brian Innes. At times only 20 votes separated the two, but Mr. Schellenberger pulled away and had a lead of more than 800 votes when The Canadian Press called the victory.

Canadian Alliance hopeful Marian Meinen came third, fighting for the spot throughout the night after a surprisingly strong showing by NDP candidate Sam Dinicol, who ran fourth.

Mr. Schellenberger managed to overcome the small-c conservative vote-splitting between the Tories and the Alliance that had elected many Liberals in Ontario in the past. The two right-wing parties spent much of the campaign attacking each other in an effort to establish momentum in the battle for Ontario conservative votes.

Last night Alliance House Leader John Reynolds said he was "thrilled" that voters kicked out the Liberals, calling the result a major defeat for Liberal leadership front-runner Paul Martin.

"Even Paul Martin doesn't make a difference."

Mr. Reynolds said in the end, voters picked the party that had the best chance of beating the Liberals. "People had to look at who could win," he said.

The by-election results are further evidence that the right should unite, he added.

Mr. Schellenberger becomes the Tories' first MP in Ontario. The Alliance has two.

Despite Mr. Innes's defeat, Prime Minister Jean Chrétien's Liberals retain a comfortable majority in the House of Commons.

The question for the Canadian Alliance and the Conservatives was whether either could use the contest as a springboard to better their chances across Ontario in the general election likely next year.

Perth-Middlesex, a largely rural and small-town riding near London, had been held for the Grits for nine years and three elections by John Richardson, a former brigadier-general.

The race also became a test for new and potential party leaders as the Alliance's Stephen Harper as well as NDP Leader Jack Layton and Liberal favourite Paul Martin each visited the riding, with Mr. Harper campaigning there on five separate occasions. A number of PC leadership hopefuls also hit the hustings in the constituency.

One political scientist said Mr. Harper appears to have been successful in winning back the support of his rank-and-file party members after the effects of Stockwell Day's leadership, but had work to do with the electorate.

"I don't think he's quite moved onto that second stage in any real effective way yet," said Steven Patten of the University of Alberta.

Mr. Harper has been working for a year to overcome the negative effects of Mr. Day's unhappy leadership. Although he has won back some of the party's popularity in the West, it continues to lag in Ontario.

The Liberals have owned the riding since 1993, but it had been a Tory stronghold for generations prior to that. It was also one of the best examples of conservative vote-splitting in 2000.

Mr. Richardson won Perth-Middlesex with 40 per cent of the vote, 10 fewer percentage points than the combined votes of the Tory and Alliance candidates.

Both the Alliance and the Tories went into the race hoping to benefit from internal feuding in Liberal ranks.

Mr. Richardson resigned the seat last fall for health reasons, sparking a battle for the party nomination to succeed him.

Mr. Innes, who won the second vote, is a local party veteran who was defeated in a run for Parliament in 1984 as Brian Mulroney's Conservatives swept the Liberals from power.

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