With every seat declared the Liberals have 135 seats and the New Democrats have 19 seats leaving their potential alliance with only a total of 154 seats, one shy of the needed majority of 155.
http://www.theglobeandmail.com/generated/realtime/specialDecision2004.html
The good news is that Chuck Cadman, a former Conservative, lost his party's nomination and then decided to run as an independent and he won. He has said he will let his constituents decide in a scientific poll what party he will join, if any. If he joins the Liberals, they can reach a majority with the NDP.
Also, several recounts are likely. In New Westminster-Coquitlam in British Columbia, Conservative Paul Forseth defeated NDP candidate Steve McClurg by only 45 votes. So, an automatic recount is likely there and in other ridings in other parts of Canada.
A Florida-style recount may occur in Canada and if the Liberals and NDP fail to reach the 155 seats needed for the majority, it does seem possible that the Bloc Quebecois will, in the end, control the balance of power.
Or, perhaps no government will be able to form for any sustained period of time and new elections in Canada may come sooner than anyone expected.