Stephen Harper's Conservatives have won a stronger minority government on the strength of gains in Ontario and British Columbia.
But the Tories paid dearly for campaign missteps in Quebec, as their failure to make gains there was a big reason they fell short of outright control of the Commons.
In two and half years of minority government, Mr. Harper had sought to woo Quebeckers, seeing them as the path to a majority government.
The Tories held on to 10 seats in Quebec, the same number they won in January 2006. But they lost Michael Fortier, the Conservative International Trade Minister whom Mr. Harper had appointed to cabinet to represent the Montreal area shortly after the last election.
The Bloc Québécois again defied early-campaign predictions of collapse, ending the night with 50 seats, down from 51 in the last election.
Mr. Harper had called the election on Sept. 7, appealing for a stronger mandate to manage the economy in uncertain times. He won more seats, but not clear control, although as he took the stage in Calgary for his victory speech, he appeared elated, not disappointed, with his larger minority - and struck perhaps the most non-partisan, co-operative tone of his political career.
Mr. Harper pledged to fulfill his party's election platform, but also to govern for Canadians who had voted for other parties, too - and at a time when a faltering economy poses challenges for any government, offered co-operation with opposition MPs.
"This is a time for us all to put aside political differences and partisan considerations and to work cooperatively for the benefit of Canada. We have shown that minority government can work, and at this time of global economic instability we owe it to Canadians to demonstrate this once again," he said.
"We stretch out a hand to all members of all parties, asking them to join together to protect the economy and weather this world financial crisis."
The Conservative gains came largely in Ontario, where they won 51 of the province's 106 seats - a gain of 10 from when the election was called.
And in B.C., the Tories picked up four more seats.
Stéphane Dion's Liberals dropped 19 seats they held when the election was called - a defeat, but not as bad as some Liberals had feared in mid-campaign.
The Liberals were on track to be knocked down to only six or seven seats west of Ontario. A rare bright spot was a small gain in Quebec, where Justin Trudeau, son of late prime minister Pierre Trudeau, won in Papineau riding.
Jack Layton's NDP made a gain of eight seats - the second-highest tally in the party's history. But it was still not the major breakthrough they had hoped for, and their share of the vote was essentially unchanged from the last election.
But the New Democrats made substantial gains in Northern Ontario, gained a toehold in Newfoundland with Jack Harris's win in St. John's East, and held on to deputy leader Thomas Mulcair's lone Quebec seat in Outremont.
The election results turned not as much on more votes for Mr. Harper's Conservatives, but the softening of Liberal support.
The Conservatives have won about 37 per cent of the popular vote, up one percentage point from 2006.
But Mr. Dion's Liberals garnered the lowest share of popular vote the party had ever tallied - lower than the 28 per cent the John Turner-led Liberals garnered in 1984.
The Grits lost about four percentage points from 2006, leaking a little to the Tories, but also to the Greens.
The results will likely lead some to question whether Mr. Dion's deal with Green Party Leader Elizabeth May, in which he agreed not to run a candidate against her in Central Nova and lobbied for her inclusion in the leaders' debates, was a losing strategy.
Mr. Dion conceded defeat with grace, but appeared to indicate that he expects to lead the Liberals in opposition in coming months, saying he told Mr. Harper in a phone call that he would work with him in the new Parliament to confront the global economic crisis.
"My priority, the priority of the official opposition, will be the economy, will be the economic storm that we see around the world, will be to protect Canadians, our savings, our homes, our jobs, our pensions," he said.
But Mr. Dion's control of his own party has never been solid, and he will almost certainly face pressure to step down.
Two possible front runners, Toronto MPs Bob Rae and Michael Ignatieff, were both re-elected, and the fourth-place finisher from the party's 2006 leadership race, Gerard Kennedy, was elected in Toronto's Parkdale-High Park riding.
For Mr. Harper, it was a mixed bag - a larger caucus, but no majority. He was shut out in Newfoundland, did poorly in Quebec, but won handily from Ontario westward to B.C.
Only one of his cabinet ministers, Michael Fortier, who resigned from the Senate to run for a Commons seat, lost; he was beaten easily by Bloc Québécois incumbent Meilli Faille in Vaudreuil-Soulanges.
Former foreign affairs minister Maxime Bernier, forced out of cabinet for leaving classified documents at the home of former girlfriend Julie Couillard, was handily re-elected in his riding of the Beauce, southeast of Quebec City.
In Saskatchewan, another cabinet minister who gaffed, Gerry Ritz - who made tasteless jokes about the victims of the tainted-meat crisis - was also re-elected.
In Atlantic Canada, the Conservatives gained a few seats but were swept out of Newfoundland by the backlash over the Atlantic Accord.
Green Party Leader Elizabeth May, the first leader of her party ever to take part in national leaders' debates, lost her bid to unseat Tory Defence Minister Peter MacKay in Nova Scotia's Central Nova riding - finishing second, but not close.
But when Mr. Harper forms another Conservative government after tonight, he will do so without a minister or MP in Newfoundland. Premier Danny Williams' Anything But Conservative movement appeared to strike a chord with Newfoundlanders who felt betrayed by Mr. Harper's change in stance on offshore resource revenues.
Mr. Harper lost all three of his Tory seats in Newfoundland, including both St. John's seats, where Loyola Hearn and Norm Doyle did not run again, and Avalon, where MP Fabian Manning was defeated by his Liberal challenger, Scott Andrews.
And in Nova Scotia, MP Bill Casey - who was kicked out of the Conservative caucus for voting against the budget because he believed Mr. Harper broke his promise to leave offshore resource revenues untouched under the Atlantic Accord - won by a huge margin to keep his seat as an Independent.
Still, the Conservatives ticked up elsewhere in Atlantic Canada, eking out small gains by picking up seats from the Liberals in New Brunswick and Nova Scotia and PEI.
In his speech to supporters late in the evening, Bloc Québécois Leader Gilles Duceppe said Quebeckers had rejected the Conservatives' cuts to arts and culture and his hard-line approach to youth justice.
He pointed out that the Bloc won five times as many Quebec seats as Mr. Harper's, and two-thirds of Quebec's ridings.
"That's strong," Mr. Duceppe said. "Without the Bloc Québécois, Stephen Harper would be forming a majority government."
Canadians headed to the polls on a day when the stock market climbed sharply higher. Plummeting markets appeared to shake voters' confidence last week, but while voters trooped out today, the S&P/TSX Composite Index was climbing, closing the day up 9.8 per cent.
Voter turnout was just 59 per cent, the lowest in federal election history.
When the election was called Sept. 7, the Conservatives had 127 seats, the Liberals 95, the Bloc Québécois had 45, and the NDP 30. There were 4 independents, including former Liberal Party MP Blair Wilson who briefly sat as a Green Party MP, and 4 vacant seats.