Partial results provided by the Canadian Broadcasting Corporation showed the Conservatives were set to win 10 of the 32 seats in the four Atlantic provinces- a gain of three -while the Liberals would slip three to 19. These figures were incomplete and could still change.
Polls in the last three weeks of the campaign consistently showed the Conservatives of Stephen Harper were set to win the election, ending 12 years of Liberal rule, but would not control a majority of seats in Parliament.
Support for the Liberals had slipped amid voter fatigue and a major kickback scandal which brought down the minority government of Prime Minister Paul Martin in November.
The early results showed the left-leaning New Democrats would keep their three seats in the eastern region. Public Works Minister Scott Brison - who is from Atlantic Canada -was in a buoyant mood, telling supporters at a rally that the Liberal Party "continues to build the progressive social policies that make Canada the envy of the world".
The election is a rematch of the 2004 neck-and-neck race with the Conservatives that gave Martin a minority government.
The weather across most of the country was unusually mild and officials in Eastern Canada, where the polls first opened, said the turnout had been brisk. Just 61% of voters, a record low, took part in the last election.
In his campaign, Harper vowed to clean up government, cut the national sales tax, clamp down on crime and cut waiting times for health care. He said Martin had not given voters a compelling reason to hand the Liberals, who took power in late 1993, a fifth successive mandate.
Recent polls predicted the
Conservatives were set to win
Two other parties, the separatist Bloc Quebecois and the New Democrats, appeared set to win a substantial number of seats, making it unlikely that either the Conservatives or the Liberals would win a majority government.
That means Harper would need to look to other parties for support. As the Conservatives have no natural allies in Parliament, analysts believe a minority Harper government would be likely to last between a year and 18 months.
Martin has fought mainly on his record, particularly an economy running healthy budget and trade surpluses.
As the Liberals slipped in the polls, Martin stepped up his attacks on Harper, saying he would leave the weak behind, curb abortion and let Washington determine Canadian foreign policy.
Most polling stations will close at 9:30pm Eastern Time (0230 GMT on Tuesday) or 10pm. Canadian law bars the posting of early election results on the Internet until after the last polls are closed to prevent voters from being influenced.