By David Ljunggren
OTTAWA (Reuters) - Canadians voted on Monday in one of the country's most unpredictable elections ever, one that could give the ruling Conservatives a more solid grip on power or, just as easily, force them out of office.
The right-of-centre Conservatives, who have governed Canada since early 2006, started the campaign with a healthy lead and said they needed a majority of seats in the House of Commons to let them focus on the economic recovery and keep taxes low.
Over the last two weeks, Prime Minister Stephen Harper has watched his advantage dwindle in the face of an extraordinarily effective campaign by the left-leaning New Democrats, a pro-labour party that has never held power nationally.
Harper says that unless he gets a majority, opposition parties will unite to oust him and create "a ramshackle coalition" that would cause enormous damage.
"I just want to make sure our country keeps going, creating jobs, and that we do not take a risk of a minority Parliament that drives us off the cliff economically," Harper told CFRA radio in an interview on Monday.
The death of Osama Bin Laden could give a last-second lift to the Conservatives, the party that has staked most on defence and security. The NDP, which has deep anti-military roots, wants to pull Canadian forces out of Afghanistan immediately.
Much will depend on whether the New Democrats, whose organizational structure is weaker than that of the Conservatives or the official opposition Liberal Party, can get their supporters out.
The New Democrats and the Liberals are competing for the same centre-left voters and if they split that vote, the result could mean a narrow majority for Harper. That would ensure him a fixed four-year term in power.
The prospect of political confusion has weighed on markets, who nevertheless noted that all three main parties have vowed to eliminate the budget deficit in the next few years.
"Markets are somewhat nervous ... Even though tonight we get the results it doesn't necessarily end all the uncertainty as to what happens. So there could still be more to come in the weeks and even months ahead," said Camilla Sutton, chief currency strategist at Scotia Capital.
The New Democrats promise to increase corporate taxes, limit the interest charged on credit card balances and introduce a cap and trade system to curb greenhouse gases.
"I believe (NDP leader Jack Layton) deserves a chance," said Rejean Paquette, 46, who said he was voting NDP for the first time after "complete disappointment" with the Conservatives.
Opinion polls show that the Conservatives will have the most seats in the new Parliament. But if they don't have a majority, they can only govern with support from other parties, as has been the case since 2006. The Conservatives currently hold 143 of the 308 seats in the House of Commons.
The last polling stations close at 7 p.m. (3 a.m. British time on Tuesday) in the Pacific province of British Columbia, and exit polls are likely to tip a final result soon after that.
Some voters said they agreed with Harper that a majority was the best option for Canada, the largest supplier of energy to the United States.
"I voted for the Conservatives because of all the leaders there Harper is the best leader and he's got the experience," retired federal worker Arthur LeBlanc, 77, said at a polling station in the Nova Scotia capital of Halifax.
"I am voting for the experience of the man, even though I don't like him."
(Additional reporting by Pav Jordan, Randall Palmer and Janet Guttsman)
