The nationwide implosion of the Liberals left the party with just two seats in B.C., and observers say it will take the Grits years to climb back out of the hole they've dug themselves -- if they ever do.

The Liberals lost three seats in British Columbia, and held on to the remaining two Vancouver ridings in surprisingly tight races. Across the country, they were reduced to just 34 seats.

Hedy Fry won an easy victory in her Vancouver Centre riding in 2008, but fought off tough challenges from both the NDP and Tory candidates this time around, winning by fewer than 3,000 votes.

Fry told reporters Monday that her party got caught between the NDP on the left and the Conservatives on the right.

"The Liberals got squeezed," she said.

Fry has been in power for nearly two decades, winning her first election in 1993. She says that the party will now have to take some time for reflection to figure out what went wrong and how the party can win back voters.

"We're going to have to sit down and do a lot of navel gazing. We're going to have to sit down and talk with each other and be open and honest and frank, and then see where we go," Fry said.

But University of B.C. political scientist Richard Johnston says it may be too late for the party.

"I think they're doomed," he told ctvbc.ca.

He says the Liberals "defied nature" by thriving as a centrist party for decades. Centrist parties throughout the British Commonwealth have traditionally floundered, from the Liberal Party of the U.K., which was displaced by Labour in the 1920s, to the one-seat United Future of New Zealand.

"It's hard to mobilize supporters and donations and volunteers from people who really believe in your cause when your cause is the maintenance of the status quo or the centre," Johnston said.

He says that support in Quebec kept the party going for a long time, but the NDP's surprise sweep in that province has left the Liberals without a base. Now, Johnston predicts that party members will begin defecting to the right and left.

"I believe that over the next few years, you will see a steady bleeding from the Liberal Party," he said.

On the other hand, Angus Reid Public Opinion pollster Mario Canseco says that the Liberals' history as the so-called "natural governing party" proves it is possible for a centrist party to hold power.

"You could argue that there's a future for centrist politics in Canada, because from time immemorial it has been run from the centre," Canseco said.

He says, however, that it will probably take the Liberals at least a decade -- or two election -- to find their groove again.

"It's about rebuilding the party and figuring out where the party needs to be in the political landscape," Canseco said. "It's really about what is going to happen with the Liberal brand down the road."

Liberal Joyce Murray, who won Vancouver Quadra by 2,000 votes over her Conservative rival on Monday, thinks the party is here to stay.

"I've got an unshakable faith in the Liberal Party of Canada, as do millions of Canadians," she told ctvbc.ca.

A merger on the left?

There's always the prospect of the party merging with the NDP into a pan-liberal behemoth, an idea floated by Liberals Ujjal Dosanjh and Bob Rae, both former New Democrat premiers, after Monday's election.

But if that happens, the Liberals will likely have to do the propositioning.

"With the NDP over 100 seats, there's no need for them to steer this conversation," Canseco said.

Former NDP strategist Bill Tieleman says that the Liberals will have a tough time selling the idea to the New Democrats.

"I don't think the Liberals are in any position of strength to negotiate; they're lying in the middle of the road dazed and confused and run over, and I think Jack Layton holds all the cards right now," Tieleman said.

Liberal MP Murray didn't want to speculate on the possibility of a merger.

"I'm not thinking about that, I'm thinking about what I was elected to do," she said.

Liberal Senator Larry Campbell says that it's too soon to think about mergers. The party has been in "election mode" for the last six years, he said, and there's no need to do anything rash.

"With the majority government and four years ahead of us, I think we have a lot of time to sit back and see where we're going," he said.

But Campbell says it wouldn't hurt to put the idea out there.

"There has to be discussions with the NDP, and I think we will see what comes from that," he said.

Long-time Vancouver East New Democrat MP Libby Davies told CTV News that it might be a bit disappointing to see the left unite, leaving Canada with a virtual two-party system.

"It's actually been a positive and a plus that we have different parties. We have a broad public discourse about politics in this country. I'm loath to go down that road that they have in the United States," she said.

Liberals search for a new leader

In the meantime, the Liberals are left without a leader after Michael Ignatieff's announcement Tuesday that he will be resigning his position.

Canseco says the party would be wise to look to Jack Layton's example as they search for a replacement.

"They will have to have somebody who can stand up in the house and talk about what the other parties are doing ... somebody's who's a feisty figure inside the house, who can make the party relevant again," he said.

Names like Bob Rae, Justin Trudeau and Scott Brison have been tossed around by pundits, but Tieleman says there are few obvious choices for the new leader.

"Bob Rae is not the guy to lead the party. Justin Trudeau has the name but not the substance," Tieleman said.

"Everybody else just has a lot of baggage."

As for Fry, she just knows that she's not the person to lead the party.

"I tried it once, and I did not succeed," she said, referring to her failed 2006 run for the leadership position.