Will the Liberal Party be able to regain its traditional terrain? This is the essential question of the election. Will this defeat be the start of a permanent realignment in favor of the Conservative Party or will it be a temporary outburst like the avalanche that elected John Diefenbaker in 1958?

TO REGAIN ITS POSITION as the dominant party in the land, three conditions must apply.

First, Mulroney must have difficulty in managing his party and causes. The ball is in his court. In 1983 he led right-wing forces oposed to Red Toryism to undermine Joe Clark and claim the leadership. Outflanking Clark on the right one year, he reversed his field and outflanked the Liberal Party on the left in 1984.

But what about the Tory true believers? Will they be content to follow a direction they do not believe in? Eventually Mulroney must do something to appease his right wing and that will be the Liberal Party's first opportunity.

Second, the Liberal Party must once again become a party of ideas, especially on economic issues, Mr. Reagan has proven that massive doses of Keynesianism still work. Too many Liberals for too long listened to the Bank of Canada, the Department of Finance, and other defenders of the conventional order. Full employment--rather than tight money--must become the paramount goal of the Liberal Party.

Third, the Liberal Party must make an issue of the one piece of its legacy that Mulroney did not adopt, the drive for an independent course in Canadian foreign policy: Throughout the campaign, Mr. Mulroney exclaimed that he was prepared to give the benefit of the doubt to Mr. Reagan's foreign and defense policies. This will give little assurance to millions of Americans and our other friends who haved doubts on their own about the wisdom of the Reagan approach. The last thing the Western alliance needs is another conservative voice urging "Go Ron Go." Mr. Mulroney may learn that Canadians are little disposed to give up independence for sycophancy.

Thomas Axworthy served as Principal Secretary and Chief of Staff to former Canadian Prime Minister Pierre Elliott Trudeau. He is currently a fellow at the Institute of Politics.