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I believe the Canadian system is the same as the UK system so I can tell you about that. I apologize if there are some differences that I miss.

But the answer into if you or your friend is right, is that you're both right. In the parlimentary system of gov't each party will have a leader that is elected by their party. They still have to run as an individual Member of Parliment (MP) for a certain riding (electorial district). Which ever party gets the most seats usually will become the government. However, after the election they don't automatically form the gov't. The Queen (or Governor General in Canada) will invite the party that she feels will be able to best govern the house to form the gov't.

This is almost always the party that won the most ridings and has the most MPs. However, unlike the US, both Canada and the UK have more than two parties. Therefore, it's possible for the party that won the most ridings to not have more than half of the seats, making it difficult for them to pass any legislation. This can result in a coalition or minority gov't. If two parties, who together have more than 50% of the seats, decide to form a coaltion, the queen my ask the leader of one of those parties to form the government, thus he/she would become the Prime Minister. Even if their party didn't have the most seats.

Also important in the UK/Canadian system is that if the government fails to pass legislation, the opposition parties can request a 'non-confidence' vote. If the governemnt loses that, then the Queen can either appoint one of the other parties to form the governemnt, or get them to call an election. We don't have set election terms like the US.

Clear as mud right?

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