Kevin O'Leary will now campaign to elect Maxime Bernier as the next leader of the Conservative Party after the celebrity businessman's stunning decision to drop out of race and support his former rival.

Mr. O'Leary and Mr. Bernier held a joint news conference at the Fairmont Royal York hotel in Toronto shortly before the final leadership debate to announce the new partnership, which Mr. O'Leary first revealed during an exclusive interview with The Globe and Mail.

Mr. O'Leary said he made his decision to drop out of the race and throw his support behind Mr. Bernier because he realized he can't win a general election due to lack of support in Quebec.

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"It's for the sake of the party that I do this, and the country. Because I can't deliver Quebec. I can't win. That's my opinion. I wish it was different," Mr. O'Leary told The Globe in his downtown Toronto office.

"The worst thing for me to do is to win the leadership and lose the election. That is a disaster for everybody involved here."

The move came on the same day the remaining 13 candidates gathered in Toronto for the final leadership debate and as Conservative members begin to receive their mail-in ballots. Mr. O'Leary's absence at the debate was noted at the beginning of the two-hour event, when the crowd was told he was leaving the race.

"Elvis has left the building," Conservative MP Erin O'Toole, who is considered a second-ballot contender, told the audience.

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Mr. O'Leary's abrupt exit has rocked the race and solidifies Mr. Bernier's status as the front-runner in the lead-up to the May 27 results. The last to enter the race less than four months ago, Mr. O'Leary was accused by some competitors of being an interloper who wasn't dedicated to the party. He was frequently criticized for being in the United States during the campaign.

To displace Mr. Bernier, other candidates would likely need to start endorsing each other, but none made the leap at the debate.

Some focused on a vision for the party as united and positive to beat Prime Minister Justin Trudeau.

"Nothing frustrated me more than the last election and the negative impression that we got around Conservative policies," said Saskatchewan MP and former Commons speaker Andrew Scheer.

Other candidates turned their criticism to Mr. Bernier, who has proposed ending Canada's supply-management regime that governs milk, chicken and egg production.

Michael Chong, who is running on a revenue-neutral carbon tax plan, said Mr. O'Leary's exit shows the next leader must speak French.

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"I think Conservatives now have to focus on the clear, stark choice before them," he said after the debate. He said some of Mr. Bernier's proposals to cut federal programs "are extreme."

Mr. O'Leary said that since he joined the race in January, he has seen his support grow in every province except Quebec, where he has been unable to get beyond 12 per cent.

He said he believes the party has to win 30 seats in the province to beat the Liberals in the next election.

"I have extremely high likelihood of winning the leadership race, but no way to win the election because of Quebec," he said.

"You have to win 30 seats. So, who can do that? It's Bernier."

Mr. O'Leary and Mr. Bernier said they first met last June and had been in touch at various times throughout the campaign. Mr. O'Leary said he had recently come to the conclusion that his support wasn't going to increase in Quebec, although he didn't directly attribute the stagnation to his lack of French.

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Mr. O'Leary said he recently received the Conservative membership list and was surprised by the large number of members, topping 259,000, as well as the fact that ballots are already being mailed out to members.

Mr. O'Leary said that he discussed his decision to recuse himself from the race with Mr. Bernier at 1 a.m. on Wednesday.

"It seemed totally disingenuous if we're sending this out and even contemplating this merger … not to get it out in the street. I was planning to do this next week," Mr. O'Leary said at the news conference.

Mr. O'Leary said he'll do anything Mr. Bernier needs him to over the next 15 months to help him beat Mr. Trudeau, including using his significant social media heft and international media outreach to bring younger members to the party.

Mr. Bernier said he welcomed Mr. O'Leary's support and would be campaigning with him for the final five weeks of the race.

"He was my biggest opponent and a strong competitor. You know I like competition. I like competition in the free market, I like competition of ideas," Mr. Bernier said.

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"We had a nice competition and now we are together."

Mr. O'Leary said he will continue to raise funds for his own aborted campaign.

"Of course. Every candidate continues to fundraise. It costs money to campaign, I'll continue to do that," Mr. O'Leary said.

The two candidates had been at odds during the race. Mr. O'Leary accused one of his rivals, later alleged to be Mr. Bernier, of widespread fraud and vote-rigging, which led the party to remove more than 1,300 people from its membership rolls. Mr. Bernier shot back with his own accusations against Mr. O'Leary, and called him a "loser."

When asked Wednesday whether he still believes Mr. O'Leary was a loser, Mr. Bernier replied, "He's a winner."

"I love politics," Mr. O'Leary said.

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One major policy difference between Mr. Bernier and Mr. O'Leary is supply management – the price stabilization of dairy products – which Mr. Bernier does not support. But the two candidates said their policies are "practically identical."

"That's the only policy issue that we don't agree on, but I did it for a specific political reason," Mr. O'Leary said.

"I took supply management to try and get more votes in Quebec. That was it … it didn't work."

He said he still thinks supply management needs to be negotiated with the United States.

He said he had hoped he could get more traction in Quebec, where he was born and lived until he was 7. "I was hanging out at the Orange Julep [in Montreal] every week."

"Like, what does it take to crack that province," he said.

"And I thought I'd get more support. I have to be honest with you."

Mr. O'Leary said he'd still consider running for a seat in Parliament, including against Foreign Affairs Minister Chrystia Freeland in the Toronto riding of University-Rosedale.

"I've been toying with taking on Freeland in Rosedale. That could be interesting for her. She might enjoy that contest," he said.