For me, this question is answered simply: Canada is better off with the number of parties we currently have.
Political parties play a central role in Canadian democracy, representing an important link between the government and society. The five parties present in the House of Commons allow things to be accomplished in Parliament and contribute to the success of our electoral system by giving Canadians a spectrum of platforms and policies to choose from. The parties are distinct, with unique ideas and policies that run the gamut of the political spectrum. However, they are all still able to work together (when necessary) and collaborate on important issues.
I will use the United States and Israel as examples of countries with an inefficient number of political parties.
The United States has only two parties: Democrats and Republicans. Less choice might seem great, right? However, in this case, less choice does not equate to a more efficient system. The two parties do not offer enough selection for the American people. For some, the Republicans are too conservative, and for others, not conservative enough. If you are a Democrat, a real liberal-type, but you strongly disagree with a key Democrat position, will you vote for the Republicans instead? Probably not. In this case, you are left with very few other options. Therefore, if you do not like the Republicans, your only alternative is the Democrats, and vice versa. Additionally, this system indicates that the US government believes the public is incapable of making difficult decisions with many options, thus, only gives them two. In the long run, this type of system simply jades people.
Israel: The land of milk, honey, and about a million political parties. In the 2008 election, around 56 parties ran with only 17 parties gaining seats in the Knesset. In this model, there is too much selection, making it virtually impossible for any party to form a government without a coalition with another party. In this case, a coalition is formed with a party that your vote may not have gone to. I find this to be insincere and misleading to voters. As well, the political spectrum is too broad, which makes it difficult for parties to work together and accomplish important policy goals.
In conclusion, I think that Canada has the ideal number of political parties. This blog post has proven that I am the Goldie Locks of the party system commentators. Israel has too many parties, the United States has too few but Canada is just right.