After considerable internal dissension, Day resigned as Canadian Alliance leader to be replaced by Stephen Harper who had re-entered federal politics after remaining aloof during the party's formation. Negotiations were then undertaken between Harper and Peter MacKay, who had assumed the leadership of the Progressive Conservative Party of Canada. In the fall of 2003 an agreement in principle was reached to merge the two parties to create the Conservative Party of Canada (CPC). In March 2004, the leadership of the CPC was won by Stephen Harper.