Yes and the Liberal attempt to bring the Green Party into Parliament by not opposing their leader failed.

I get the impression that Stephen Harper's master plan is to reduce the Bloc Quebecois and Liberals to minor party status and create something like the British political system of the 1950s.

In a Conservative/NDP two party system, the Tories would win most of the rural and suburban seats in most elections. In a Canadian context the big cities represent a minority of the country, so a party which only wins the urban seats is going to be in opposition. As the Liberals have more chance of winning significant numbers of seats outside the cities than the NDP in a good election, it would be in the Conservative interest to have the latter as the principal challengers.

Frequent elections would be very difficult for the Canadian Liberals, who are short of cash and have a decaying organisation. This could have the same effect as the British elections in 1922, 1923 and 1924 which cemented the British Liberals into third party status, in a Conservative/Labour two party system.