Canada's ruling Conservative party led by Prime Minister Stephen Harper has won the country's general election.

The Conservatives won 167 of the 308 seats in the House of Commons in yesterday's federal election.

The party has long planned to cut the corporate tax rate to 15% next year from 16.5%, as it seeks to help Canadian business compete in a global market.

At his victory party early this morning, Mr Harper said the first job would be to implement what they set out in their budget - plans for jobs and growth without raising taxes.

Other tax breaks, including a family-friendly plan that will lower tax rates for couples with children, will follow once the government eliminates Canada's record-breaking budget deficit.

They promise that will happen within four years.

The election polarises the Canadian political scene, leaving just two parties with a significant number of seats in parliament.

The left-leaning New Democrats won 102 seats to become the official opposition.

The Conservative agenda is a plus for Canada's business sector, which had fretted at the possibility of the pro-labor New Democrats forming a minority government, supported by the Liberals.

The New Democrats had promised to eliminate subsidies for the oil industry and bring in environmental curbs.

Canada emerged from the global financial crisis in better shape than most other economies, helped by its strong reliance on energy and commodity exports.

Canada is the largest supplier of energy to the US.

Mr Harper says he will eliminate the Canadian Wheat Board's monopoly position on wheat and barley exports from Canada's western provinces. He also said he will eliminate public financing for political parties, something that may cripple opposition parties less adept at raising funds than the Conservatives.

His government is more likely to approve foreign investment in Canada than the New Democrats would have been, boosting the chance that the London Stock Exchange's takeover bid for its Toronto rival, TMX Group, will win a Canadian green light.

Opponents say Stephen Harper, from the west of Canada, is beholden to social and religious conservatives who want to curb abortion rights and scrap gay marriage laws.

The Prime Minister says he has no plans to reopen the abortion debate and would work to block anyone who tried to do so. Abortion is legal in Canada.