Though the 308-member House of Commons easily passed the Liberal Party's popular budget by a vote of 250-54 on Thursday evening - it was an amendment to the federal document that served as the true test of confidence and took a tie-breaking vote by the speaker to win.
"The margin of tonight's vote is very narrow - indeed that is an understatement," said Martin, moments after Speaker Peter Milliken broke the nail-biting 152-152 tie on the amendment.
"We must now move forward in a spirit of cooperation. We ask the opposition to join with us in a renewed effort to make this Parliament work for the people of Canada."
The hero of the day for the Liberals turned out to be independent MP Chuck Cadman, who voted to side with them.
"Parliament has voted by the slimmest of margins to keep the Liberals in office for the time being"
The British Columbia representative had remained silent for weeks about which side he would take.
Two other MPs sat out the vote, as they were ill, and there is one vacancy in the House of Commons. It was the first time in Canadian history that a speaker has broken a tie on a vote to defeat a government.
The House has been paralysed for weeks, with the opposition Conservative Party obstructing business through motions to adjourn and demands that Martin resign. They have latched on to a corruption scandal within his Liberal Party, insisting he no longer has the moral mandate to govern.
Martin is not implicated in the money-laundering scandal. One of his first tasks when made prime minister last June was to launch a federal inquiry into a national unity fund that allegedly allowed senior Liberals to funnel millions of dollars into their Quebec coffers.
The opposition believes the
government is weakened
"Parliament has voted by the slimmest of margins to keep the Liberals in office for the time being," Conservative leader Stephen Harper said after his narrow defeat. "While I regret this decision deeply, it has shown now more than ever the necessity for a strong, united and principled opposition dedicated to replacing this government."
Martin had pleaded with his opponents to pass his proposed federal budget and let the federal inquiry complete its investigation. He has pledged to call elections within 30 days of the commission's report, which is expected at the end of the year.
Martin last week called for a motion on his proposed budget and said it would stand as an official test of confidence in his 11-month minority government. If the budget had failed, Martin would have been forced to dissolve parliament and trigger elections that polls have shown are widely unwanted by the Canadian people.
Martin came out of a cabinet meeting just hours before the vote and said Canadian's relations with the United States would remain high on his agenda, if allowed to remain in power.
Martin's proposed federal budget calls for an injection of $10.6 million to overhaul Canada's beleaguered military, a demand long sought by Washington and Canada's European allies, so that it can play a bigger role in securing the 49th parallel and peacekeeping efforts worldwide.
It would also upgrade the country's anti-terrorism efforts.
Canada has pledged to tighten its borders after September 11 but has declined to send troops to Iraq or sign on to the US missile defence shield.
Washington and Ottawa have been embroiled in disputes over softwood lumber tariffs and a ban on Canadian beef.
"I want Canadians to know that we really need to find a better way to solve our disputes," Martin said about working with Washington.