Party members voted 148-109 against adopting as policy a statement approved last year that affirmed the rights for everyone regardless of race, religion, sexual orientation, and other differences.
Instead, the party voted to go with the current policy definition, which broadly promises to "recognize that all Albertans have equal rights, privileges and responsibilities."
The expanded definition had been held up by the party for a year as the shining example of a new moderate centrism palatable to Albertans across the political spectrum.
On Friday, Wildrose Leader Danielle Smith, in her keynote speech, even hailed the motion as a triumph and a symbol of a mature party ready for power.
"We needed a definitive statement to protect the equality of all Albertans, including our friends in the LGBTQ community. So we drafted and we passed one," she said in the speech.
On Saturday, Smith said she was out of the room when the rollback vote was taken, and would've voted for the expanded definition.
She said the defeat doesn't change anything.
"The nature of the debate was (the members) were concerned that there might be something excluded in that long list," said Smith.
"I think that was a reasonable position to take. I certainly don't think anyone should take offence.
"In the last year we have demonstrated how much we support members of all communities, in particular our LGBTQ community."
She said she has noted her party has donated money and time to support events and causes in the gay community.
"I think our actions speak very loudly about our support," she said.
Kris Wells, with the Institute for Sexual Minority Studies for the University of Alberta, said the Wildrose party has taken a giant step backward.
Wells said refusing to identify to minority groups denies them critical visibility and recognition that they are deserving of equal treatment.
"Obviously the Wildrose has not learned the lesson of the recent byelection (losses)," said Wells.
"They remain out of step with the majority of Albertans. They had a chance to show they had changed and had recognized the vulnerability of minorities, and they failed."
The right-centre Wildrose party has historically struggled with the perception it is bigoted and extremist.
In the 2012 election, the party was on the road to winning government when it was derailed by controversies including comments by one of its candidates, Allan Hunsperger.
Hunsperger, in a blog, urged gays to repent or face an eternity in hell's "lake of fire." The storm of controversy grew when Smith refused to remove Hunsperger as a candidate.
She also refused to remove a second candidate for remarks deemed racist.
The 2012 defeat prompted party soul-searching that culminated in an emotional vote in October 2013 at the annual general meeting, also in Red Deer.
Wildrose house leader Rob Anderson, in a emotional speech at the time, told delegates it was time to adopt the expanded definition and wipe away a deceitful smear of intolerance.
"We believe, in this party, in the equality of all Albertans," Anderson said at the time.
"We need to be loud and proud and put this to bed once and for all.
"Let's pass this and send those PC fearmongers scurrying back under the rocks from where they came from!''
Seconds later, the 500 delegates in the room voted by a large margin to endorse the resolution.
Saturday's vote wrapped up a two-day convention that saw the party discuss and suggest ways to move on from four recent byelection defeats to Premier Jim Prentice and the PCs.
Earlier Saturday, party members told Smith in a bearpit session that the Wildrose should not have run negative ads against Prentice in the byelections when the electorate at the doors was looking for positive solutions.
In Friday's speech, Smith blamed the media for slanting or ignoring positive Wildrose announcements to foster the narrative of a negative and angry party.
Smith said her team will now work outside the media to create a buzz for the Wildrose through community events, potlucks, and one-on-one ambassadors.
She said they will also ramp up their social media presence with a hundred Wildrose bloggers.
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