When we talk about the urgent need to eliminate right-wing extremism from Canadian politics, I am not sure why people jump to the idea of us ending up with a two-party system. There are several political parties in Canada, not all of them are either the Liberals, or the NDP or the CPC.
That being said, the Conservative movement in Canada is an existential threat to Canada having a future at all. Sure, the NDP and Liberals could merge, they could also schism again later.
If I could make it happen, I would certainly arrange for a alliance between the Liberals and the NDP bent on the utter destruction of the CPC. That is after all exactly what happened with the Unite the Right movement that had the Reform/Alliance party devour the Progressive Conservatives and made our situation so much worse in Canada and saddled us with Harper.
When the Cons no longer have any political power, when they lose the ability they have now to dominate our political discourse, when their extremism and corruption are irrelevant, then I would experience insuperable delight watching the Liberals, NDP, Greens, etal in a war of reasonable ideas for a better future.
Unfortunately while the Conservatives are always calling the tune, no forward movement is even possible.