NIAGARA FALLS, Ont. — Ontario's once powerful Progressive Conservatives emerged from their first conference since losing last year's election needing a new leader and facing an $8.4 million debt, which one leadership candidate admits hurts the party's reputation as strong fiscal managers.

"No, it doesn't look good at all," former cabinet minister Frank Klees said Sunday as about 600 provincial Tories wrapped up a three-day policy conference in this border city with a session on the debt.

Klees was very critical of the non-elected backroom strategists who engineered the Conservative's disastrous election campaign and ran up the debt without informing caucus of the dire financial situation.

"The issue here isn't so much the debt, as it's a debt none of us knew was going to be there," Klees told reporters.

Rival candidate Jim Flaherty, a former finance minister, was more concerned with having a plan to eliminate the party's debt than with how it built up. "It's not uncommon for political parties to be in debt after an election," he said.

"We lost the election badly. There's a lot of grumpiness about who did what, but I'm not interested in pointing fingers."

However, Flaherty admitted the former governing party will have a hard time raising money, having just lost an election and with competition from a federal Conservative leadership race hitting the same pool of backers for financial support.

"It's going to be much harder than it was before," said Flaherty. "We also have to make sure that contributors know the money is being well spent."

Flaherty and Klees confirmed their plans to seek the Tory leadership Friday after Ernie Eves announced he wanted the official Opposition to have a new leader in place before the fall sitting of the legislature.

President Blair McCreadie admits the party has some challenges on its hands, but he hopes recent changes to the rules governing federal political donations will benefit provincial parties.

"I think there's a tremendous opportunity for us to go out there and be more aggressive, and get donations that may have traditionally gone to federal parties," said McCreadie.

Flaherty, known for his right-wing views, would also like to see the provincial party consider dropping the word Progressive from its name to have the same brand as the new, national Conservative Party, formed from the merger of the Canadian Alliance and federal Progressive Conservatives.

"I think it's desirable that we get much closer to the federal party," said Flaherty. Although he admitted it's probably not something on voters' minds. "I don't think people are going to change how they vote because of that," he said. However, he said the Tories "can learn from the Liberals, who are very together in what they do."

McCreadie doesn't think the party executive would be spending much time considering a name change. "I don't see how that moves us forward," he said.

Failed Toronto mayoral candidate John Tory also spent part of the weekend meeting Conservative delegates and gauging support for his own possible leadership bid, but was noncommittal to reporters.

"I'm not sure I'm going to be a candidate," said Tory.

Flaherty, the early front-runner to replace Eves, said he was pleased with the level of support he found during a weekend of one-on-one meetings with delegates, while Klees was already predicting victory.

"I'm confident when this is over that I will be the leader of this party and looking forward to the next election, the next Premier of Ontario," said Klees as the convention ended.