Canadians elected their first Conservative government in 12 years, but gave the party a far-from-decisive mandate to push through its agenda of tax cuts, extra military spending and better ties with Washington.
The Conservatives, led by economist Stephen Harper, will have some 125 seats in the Canadian Parliament, 30 below the 155 that form a majority, but still 22 seats ahead of the ruling Liberals, who came across as tired, jaded and out of ideas in a two-month election race.

Prime Minister Paul Martin, his hopes of a decade in power dashed by Monday's results, conceded defeat and 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."

Opinion polls had pointed to a Conservative minority government. But the number of Conservative seats was somewhat below the forecasts, pointing to an unstable government that is unlikely to last for long.

Three hours after the last polls closed, the Conservatives were shown winning 124 seats to 103 for the Liberals.

Traditional wisdom dictates that minority governments in Canada usually last between a year and 18 months.

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.

"Canadians voted for hope over fear and accountability over corruption," senior Conservative Jason Kenney told reporters in the western city of Calgary.

"Tonight is the beginning of a moment of reckoning for the Liberal Party."
The Liberals, long viewed as Canada's natural governing party, slumped in the polls after a series of scandals, including a kickback scheme in French-speaking Quebec and a police probe about whether the finance minister leaked market sensitive information about proposed tax changes.

They won just 30 percent of the popular vote, their second worst showing. They gathered only 28 percent in 1984.

Harper vowed to clean up government, cut the national sales tax, 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.

Like the Liberals, he promises to keep the budget balanced. He said he would not tamper with abortion rights, but would 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 key 50 percent mark and cutting the odds of a new vote on breaking up Canada.

Quebec voted against separation by just under 51 percent in a 1995 referendum that split politicians, voters and even families in the province into separatist and federalist camps. An earlier referendum, in 1980, also resulted in a victory for the pro-Canada camp.

The left-leaning New Democrats looked on course to win 30 seats -- their best showing since 1988.

PHOTO CAPTION

Conservative Party of Canada leader Stephen Harper celebrates his win in the Canadian federal election in Calgary, Alberta January 23, 2006. (Reuters)

Source: Reuters