The Conservative party, and the whole Dominion, suffered a further loss in 1894, when Sir John Thompson died suddenly at Windsor Castle. Sir Mackenzie Bowell was chosen as his successor.

Meanwhile the fortunes and the spirit of the Liberal party rose steadily. Mr Laurier's position as leader strengthened as each year gave proof of his steadfast character, his courage, and his political sagacity. He gave his time and energy wholly to the work of the party. During these years he addressed hundreds of meetings in Quebec and Ontario, and made tours to the maritime provinces and through the West to the Pacific.

The convention of Liberals from all ends of the Dominion, which met at Ottawa in 1893, had given fresh vigour to the party. At that convention, as has already been noted, emphasis was placed upon the need of lowering the tariff. It was urged that the tariff should be made to rest as lightly as possible upon the necessaries of life, and that freer trade should be sought with all the world, and particularly with Great Britain and the United States.

It was about this time, too, that D'Alton M'Carthy, who was mellowing in religious matters and growing more radical on other issues, voiced a demand for a reduction of customs burdens and for the adoption of maximum and minimum schedules, the minimum rates to be given Great Britain and British colonies and foreign countries which offered equivalent terms, and the maximum rates to be applied to countries like the United States which maintained prohibitive tariffs against Canadian products. The Patrons of Industry, an organization of farmers which for a few years had much power in Ontario, also demanded tariff reform. Even the Government went a little with public opinion and lopped away a few 'mouldering branches' in 1894. Thus the tariff remained an issue during the last five years of the Conservative régime.

A more burning question, however, was the revival of the old contest over provincial rights and denominational privileges. This was the offspring of the Equal Rights agitation, which had spread to Manitoba. In August 1889 Joseph Martin, a member of the Manitoba Cabinet, following D'Alton M'Carthy at a public meeting, announced that his government would establish a non-sectarian system of education. A few months later this was done.

When Manitoba entered Confederation, in 1870, there had been no state-supported system of education. Roman Catholics, Anglicans, and Presbyterians maintained denominational schools, supported by fees and church grants. The settlers were about equally divided between Catholics and Protestants. The Manitoba Act, Manitoba's constitutional charter, gave the new province in most respects the same powers as the older provinces. The province was given control of education, subject, first, to the provision that no law should be passed prejudicially affecting any right or privilege, with respect to denominational schools, which any class of persons had by law or practice at the union, and subject, secondly, to an appeal to the federal authorities from any provincial act or decision affecting the rights of any minority, Protestant or Catholic. In 1871 a school system much like that of Quebec was set up. Protestant schools and Catholic schools were established, and each was granted half the provincial appropriation. Later, as the Protestant population grew relatively larger, the amount was divided in proportions corresponding to the number of pupils in each class of schools. Now, in 1890, this system was completely swept away and replaced by a single system of state-supported schools. At first it had been the intention to make them entirely secular, but in the end provision was made for some non-denominational religious teaching. Any Catholic who did not wish to send his children to such a school would be compelled to pay for the support of a school of his own, besides paying taxes for the general school system.

The Catholics, first under Archbishop Taché's firm but moderate guidance, and later under Archbishop Langevin's crusading leadership, demanded redress. The provincial authorities would not change their policy. It was thought that the constitution provided ample protection for a religious minority deprived of its rights. The provision was three-fold. First, the Dominion Government might disallow the offending act. But the Dominion Government saw fit not to exercise this right, preferring to leave the matter to the courts, if possible. Secondly, there was the provision of the Manitoba Act forbidding the province to take away any rights as to denominational schools possessed by any class of persons at the union. Test cases were brought and elaborately argued in the courts. The Supreme Court held that the privilege of paying only for one's own denominational schools existed at the union, and had been infringed. The Privy Council reversed this judgment, holding that Catholics were still free to support schools of their own, and that this was the only privilege which they had before possessed.

There was still a third string to the bow—the appeal to the governor-general in council, the Dominion Government, to pass remedial legislation. Here again the Supreme Court and the Privy Council differed. The Supreme Court held, but not unanimously, that no right of federal intervention existed; but the Privy Council maintained, as the last word in the case, that the Dominion had power to intervene.

This decision put the question squarely before the Bowell Government. It was a difficult situation. An administration drawing its chief strength from Ontario, and headed by a prominent Orangeman, was called upon by the Catholic authorities to use its powers to compel a determined province to change its policy or, in default, to pass a federal law restoring the minority's privileges. But Bowell and his colleagues soon made their decision. Early in 1895 the province was ordered in uncompromising terms to restore to the minority its former rights and privileges. The legislature declined, on the ground that the old system was inefficient and disruptive, and urged the federal authorities to investigate school conditions in Manitoba, past and present, before taking the fatal step of coercion. But, after a commission had failed to induce the province to yield, the Bowell Government announced that at the next parliamentary session (1896) a Remedial Bill would be introduced and passed.

On the eve of the meeting of parliament for this last historic session came the startling news that seven of the members of Sir Mackenzie Bowell's Cabinet, chief among them being Mr Foster and Sir Hibbert Tupper, had revolted against their leader. The revolters urged the supreme need of forming the strongest possible administration in the crisis, and to that end demanded the resignation of the prime minister. Bowell bitterly denounced the 'nest of traitors,' and sought to form a Cabinet without their aid, but the strikers picketed every possible candidate. Finally a compromise was reached by which the bolters were to return under Bowell's leadership for the session and Sir Charles Tupper was to take command at its close.