It's time to "move forward together with an Ontario Liberal government," leader Dalton McGuinty said after his party won a third term, but not the majority it had sought.

McGuinty received a cautious mandate from Ontario voters Thursday night: The Liberals retained power but lost 19 seats, falling one seat shy of a majority with 45 per cent of the ballots counted.

To achieve a majority, a party must win 54 of the province's 107 ridings. The Liberals seat total was at 53 as McGuinty took the stage at the Chateau Laurier in Ottawa.

Speaking in front of cheering supporters, the Liberal leader treated the results as a victory.

"The Ontario way is not about giving into defeatism or negativity in the face of uncertain times," he said. "Instead it's about building a bright future with positive ideas, enthusiasm and hope."

But McGuinty acknowledged the message from voters and vowed to work hard to lead the province.

"It's important we be sombre-minded about the message Ontarians gave to us," he said, saying voters were telling  him "to listen more than ever and give nothing but your best every day."

The Liberals flirted with the 54 seats needed for a majority government most of the evening.

Had the Liberals won a majority, McGuinty would have become the first premier to win three successive majorities since Leslie Frost accomplished the feat for the Tories in 1959.

Instead, McGuinty may face questions about how he will govern and work with the other parties.

McGuinty praised both Progressive Conservative Leader Hudak and NDP Leader Howarth for "standing up for what they believe in" and fighting hard during the campaign and in the legislature.

Early in the campaign there was talk the premier's seat in Ottawa South might be in jeopardy, but McGuinty pulled away from PC challenger Jason MacDonald, winning just under 49 per cent of the popular vote.

Slow start to campaign

At the start of the summer, the Liberal Party appeared to be headed for defeat, with polls suggesting Progressive Conservative Leader Tim Hudak and the Tories had a healthy double-digit lead.

The unpopularity of the harmonized sales tax (HST) and rising energy costs coupled with job losses and spending scandals seemed to make McGuinty more vulnerable than before.

But during the campaign McGuinty portrayed himself as the experienced, sure-and-steady hand on the tiller in uncertain economic times, in contrast to the two other rookie party leaders.

The results suggest while voters weren't enamoured with the McGuinty government, they found neither of the other parties and leaders appealing enough to change governments.

McGuinty was first elected in a 1990 byelection to replace his father, Dalton McGuinty Sr., who had died of a heart attack. He was elected Liberal leader in 1996, premier in 2003 and re-elected in 2007.

In the 1999 provincial election, the PCs tarred McGuinty as "not up for the job." Now only Quebec Premier Jean Charest has been running a province longer.