Almost two decades later, Smith found herself tongue-tied when she met the grocer's daughter from Grantham after a lecture at Vancouver's Fraser Institute.
"I was pretty awestruck," Smith recalls.
She managed to blurt out a few words while Thatcher signed a copy of her book "Path to Power."
"I just let her know how much I admired what she'd done. I'm pretty sure I would have told her I hoped to run for political office myself one day."
That day came in the fall of 2009 when the former journalist, business leader and property rights advocate became the new leader of the Wildrose Alliance, now known simply as the Wildrose party.
The party is running second behind only the governing Progressive Conservatives in pre-election polls and is carrying the standard for balanced budgets and decentralized decision-making.
It has galvanized grassroots support from what it terms Premier Alison Redford's "nanny state" of deficit budgets, record spending and new laws that grant cabinet expanded authority over private land, leases and rights.
In her home, Smith keeps a picture of herself and Thatcher from that meeting.
"She was very decisive because she came from a principled base of leadership," says Smith.
"She was able to make decisions very quickly, because they all conformed to the way she looked at the world. The world had turned toward dramatic overspending and she knew we needed to do something to get that spending under control."
Smith says she patterns her leadership style after Thatcher, particularly the distaste for political poseurs.
"She was always very critical of so-called conservative politicians who would go wobbly. I share some of that concern.
"I don't like conservatives who are really liberals masquerading as conservatives."
The 40-year-old Smith didn't come to politics. It came to her when she was at junior high school in Calgary.
She came home one day to recount how her teacher gushed about the virtues of communism.
Her dad had roots in Ukraine, where millions had died under Josef Stalin's forced relocation-starvation schemes. Her father was apoplectic.
"He didn't think communism was so great. He told my Grade 8 social studies teacher what he thought of what we were learning. Then he realized we needed to talk a lot more around the dinner table."
The latent political interest flowered when she attended the University of Calgary in 1992 and walked past the soapbox at the so-called "Speakers Corner," listening to the orations of hard-rightists Ezra Levant and Rob Anders.
Conservatism spoke to her, and she was also entranced by the power of public speaking.
She joined the campus PC club and soaked in the teachings of "The Calgary School" of economists and political scientists, who advocated for free markets and small government.
There were Dale Carnegie courses on how to win friends and influence people. She attended Toastmasters, umming and ahhing her way through the crucible of impromptu speeches on surprise topics.
She studied John Locke. The 17th-century English philosopher espoused the sanctity of individual liberty derived from land and labour, the greater good born from clashes of competing interests, with government in a limited role as national protector and leveller of the playing field.
She read Ayn Rand, a Russian émigré author famous for "Atlas Shrugged" and "The Fountainhead," who argued that rational self-interest and a laissez-faire economy will light the way.
"What I take from (Rand's) work is her celebration of entrepreneurship," says Smith. "All of the wealth created in society comes down to the bright spark of someone's idea of bringing together capital and labour and producing a product people want."
Property rights, she says, are sacrosanct because they are liberty's floorboards.
"If you can't own property, own your business, own your printing press, own your mosque or place of worship, can you really have any other freedoms?"
Post-university, Smith championed that philosophy, fighting on behalf of property rights groups, writing editorials for The Calgary Herald, hosting a TV current affairs show titled "Global Sunday" and serving as Alberta boss for the Canadian Federation of Independent Business.
She hoped the Tories would return to fiscal discipline and balanced budgets.
But when then-premier Ed Stelmach delivered another spend-heavy budget in 2008, she'd had enough. Rumours flew she was going to jump to the Wildrose.
Tory backbencher Rob Anderson was dispatched to bring her back.
Yes, he told her, Stelmach and his cabinet didn't give a fig about the backbenchers, they spent tax dollars like drunken sailors and, yes, they had just voted themselves 30 per cent pay increases.
But they were the only game in town on the right side of the political spectrum.
Why are you going? he finally asked her.
Why are you staying? she shot back.
"This government is beyond redemption. It's out of control," Smith remembers telling him.
"The only way we're actually going to get a fiscally conservative government is to get behind this new party."
Anderson learned the lady was not for turning.
Two years later he crossed the floor and joined her.