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The confederation issue dominated Palmer's career after 1864. He kept in touch with anti-confederates in Nova Scotia and New Brunswick until the cause was lost on the mainland, he favoured making a separate agreement for renewal of reciprocity with the United States, he criticized the British government for exerting pressure in favour of union, and he opposed the "better terms" of 1869. He rarely missed an opportunity to prod the Legislative Council into declaring itself on confederation, and he left few stones unturned in adducing reasons not to join. Indeed he appears to have become almost single-minded over the issue; in considering the results of the assembly election of 1867, his pleasure at the overwhelming rejection of confederation seems to have outweighed any concern over the defeat of the Tory government. The party remained divided in the late 1860s, and when Palmer was defeated (for the only time in his political career) in an attempt to re-enter the assembly for Charlottetown in July 1870, W. H. Pope openly rejoiced.

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