The party managed a narrow victory in the Progressive Conservative stronghold of Cardston-Taber-Warner, where Paul Hinman became the first MLA elected under the Alliance banner, defeating incumbent Broyce Jacobs.
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The party's lone incumbent MLA, Gary Masyk, was defeated running for re-election in the new electoral district of Edmonton Decore, placing a distant fourth.
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In an unorthodox political move, on October 11, 2006, Alliance leader Paul Hinman encouraged his party members to buy memberships in the rival Progressive Conservative Party and vote for candidate Ted Morton in the PC Party's upcoming leadership race, as Morton is considered the candidate that is ideologically most in sync with Alliance philosophies.
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Paul Hinman was elected the party's leader at a leadership convention held on November 19, 2005.
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The Alliance gained its first Member of the Legislative Assembly of Alberta (MLA) on June 29, 2004, when Gary Masyk crossed the floor, quitting the Progressive Conservative Party to protest Ralph Klein's handling of health care issues during the 2004 federal election.
Terleskey ran as a candidate for the Alberta Alliance Party in the riding of Lethbridge West in the 2004 Alberta provincial election, and, with 949 votes, he came in fourth place among the six candidates on the ballot in that electoral district.
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He ran for the Alberta Alliance Party in the 2004 provincial election in Calgary Shaw.
In the 2004 Alberta general election Crutcher ran for the Alberta Alliance Party in the provincial constituency of Calgary-Egmont.