Several things to note from the Canadian elections.
The Conservatives picked up 19 seats, but only 1.1% of the vote and the lowest turnout in Canadian history. The most significant feature of this election was the collapse of the Liberal Party out west and in Ontario. (they actually beat many polls in Quebec) The socialist party, the New Democratic Party or NDP, cut into Liberal margins, giving Conservatives a number of ridings around the country. Furthermore, the Liberals were reduced to a regional party, getting virtually no seats west of Ontario.
That said, this election was called before the economy in the US and Europe melted down. Had this not happened, there would be a clear Conservative majority.
Look for a leadership election in the Liberal Party. Look for an extended minority government as the Liberals cannot afford (in the financial, and also political sense) another election. The big tests for this government will be handling the economic crisis (which will inevitably drift into a recession because of a drop off in US consumer activity) and his handling of the negotiations of the next international climate agreement.