In 1951, he left federal politics and ran again for the leadership of the Ontario Liberal Party and won, defeating social reformer Harry Cassidy.[3] In the 1951 Ontario provincial election, he failed to win election to the Legislative Assembly of Ontario, and the Liberals lost six of the 13 seats they had previously held. He remained leader of the party for another three years due to its state of disorganization. He resigned as leader on May 31, 1954, and was replaced by Farquhar Oliver.
On April 27, 1963,[3] he died of a heart attack, whilst he was being treated at a Toronto hospital. Thomson was buried at the Erskine Cemetery in Dunbarton, Ontario.