Born in Vancouver, she pursued studies in Sociology, English and Education at Burrard Inlet Bible Institute, Trinity Western College and the University of Alberta. She then worked as a teacher in a number of rural Alberta communities until 1989, when she won election to Parliament as the first Reform MP.
She was the party's sole elected MP until the general election of 1993, when the party elected 52 MPs. Following that election, she served as Caucus Chair and Deputy Parliamentary Leader until March of 2000, when the Reform Party was folded into the Canadian Alliance. When Preston Manning stepped down as Leader of the Official Opposition to contest the Alliance leadership race, Grey was appointed interim leader of the Alliance, and Leader of the Official Opposition, a post which she held until Stockwell Day was elected to the House of Commons in September of that year. Following that, she once again served as Caucus Chair and Deputy Parliamentary Leader.
Grey resigned those posts on April 24, 2001 in protest against Day's leadership. In July of that year, Grey and 11 other Canadian Alliance MPs, including Chuck Strahl, quit the Canadian Alliance to sit as the Democratic Representative Caucus (DRC). In September 2001, the DRC formed a coalition caucus with the Progressive Conservative Party of Canada, and Grey served as chair of the PC-DRC caucus.
In April 2002, following the election of Stephen Harper as Alliance leader, Grey rejoined the Alliance caucus, and in December 2003, the Alliance and the Progressive Conservatives ratified an agreement to merge into the Conservative Party of Canada.
Grey is married to Lewis Larson, whom she wed on August 7, 1993.