Yes, that's right, and they made an electoral virtue of it. They said they were a single-party government and if the others got in, there would be a coalition, and that would be bad. However, in 1989 they did so poorly that they could only stay in government by forming a coalition, so they had to adopt that approach, and now they're as open to coalition as anyone else.
Coalition governments typically have more votes behind them, more public votes, in that a government can't just have 40% of the votes. You need something like a majority of votes behind the parties that are in the government. There is a bit of a learning process, so if Canada shifted to that system, the first few coalitions might be a bit awkward as people learned the new rules, but the evidence is that most countries in the world have coalition governments and they can be just as stable as single-party governments.