The Conservatives, led by Stephen Harper, will have 124 seats in the Canadian Parliament, 30 below the 155 needed to form a majority. But they will still be 21 seats ahead of the ruling Liberals, who came across as tired, jaded and out of
ideas in a two-month election race.
"Each and every day I will assure you of one thing - I will dedicate myself to making Canada more united, stronger, more prosperous and a safer country," Harper told an ecstatic crowd in the western Canadian city of Calgary.
The result was a major triumph for Harper, a 46-year-old economist who created the Conservatives in late 2003 by pushing through the merger of two squabbling right-wing parties. He will be the first prime minister from the oil-rich western province of Alberta for 25 years.
Opinion polls had pointed to a Conservative minority. But the number of Conservative seats was somewhat below forecasts, pointing to an unstable government unlikely to last for long.
Minority governments in Canada rarely last longer than 18 months. The outgoing minority Liberal government stayed in power for 17 months before it was defeated in November 2005 over a kickback scandal.
The defeat was a humiliating
blow for Paul Martin
Unlike the Liberals, who governed with the help of the left-leaning New Democrats, the Conservatives have no natural allies in a four-party Canadian Parliament and will need to seek support from political rivals on an issue-by-issue basis.
Harper pledged to work with other parties to push through his agenda, which includes a cut in consumption taxes and a balanced budget.
The defeat was a humiliating blow for outgoing Prime Minister Paul Martin, who inherited a large majority when he took over in December 2003 only to see support fade as scandals swirled. He said he would not lead the Liberals into the next election.
"I have just called Stephen Harper and I have offered him my congratulations," Martin told supporters. "The people of Canada have chosen him to lead a minority government."
The Liberals, long viewed as Canada's natural governing party, slumped in the polls after police said in late December they were investigating whether someone in the finance minister's office leaked information about proposed tax changes.
Senior Conservative Jason Kenney said, "Canadians voted for hope over fear and accountability over corruption,"
The Conservatives won 36.3% of the popular vote and the Liberals won 30.2%, their second worst showing since Canada gained independence in 1867.
2004 election results
Bloc Quebecois 54
2005 election results
Bloc Quebecois 51
Harper also said he would clamp down on crime, cut waiting times for health care and improve strained relations with the United States, with whom Canada has a number of trade disputes.
He says he will allow a free vote in Parliament about whether Canada should repeal laws that allow gay marriage.
The Conservatives also put in a strong showing in Quebec, pushing the separatist Bloc Quebecois below the crucial 50% mark and cutting the odds of a new vote on breaking up Canada.
Quebec voted against separation by just under 51% in a 1995 referendum. An earlier referendum, in 1980, also resulted in a victory for the pro-Canada camp.
The New Democrats won 29 seats - their best showing since 1988. There will be one independent, a Quebec talk show host who made a career out of criticising politicians and railing against what he calls the Ottawa establishment.