Many reasons including his desire to Liberalise trade with the
USA. This issue has never had much support outside Quebec. In part
due to the number of Canadians whose roots include fighting against
the revolution and creation of the USA and forefathers were
refugees from that conflict. Others felt that Canada would never be
great if it's resources were exported raw to fuel other nations,
particularly a growing USA. Canadians have never voted for Free
Trade, the majority have been and are today against Free Trade.
Having a Free Trade platform has always cost more votes than it
gains.
Another reason was Laurier's desire to expand Canada's military
and create a Canadian Navy. Even today this costs votes in Quebec
with it's deep French roots. Many still feel the lost of the French
and Indian war in the mid 1700's and in 1911 made it clear that any
increase in the Canadian military was not a good thing for them or
their Canada.
Laurier was also up against an alliance that gave voters a
clearer choice in Ontario and helped split votes in Quebec.
It would be 77 yrs before Free Trade would again be put before
the Canadian voters and once again the majority would vote against
it but with very different election results. History continues to
play out.