Ontario Premier Dalton McGuinty will continue to lead a minority government after his Liberals won only one of two seats up for grabs in a pair of byelections held Thursday.

McGuinty entered Thursday's races needing wins in both Vaughan, previously held by Liberal Greg Sorbara, and Kitchener-Waterloo, previously held by Progressive Conservative Elizabeth Witmer, to return his government to the majority status lost in last October's provincial election.

As expected, Liberal candidate Steven Del Duca won in Vaughan, a longtime Liberal seat in the community just north of Toronto.

In the Kitchener-Waterloo riding, located about 60 minutes southwest of Toronto, NDP candidate Catherine Fife delivered a surprise win, beating PC Tracey Weiler, who placed second, and Liberal candidate Eric Davis who finished third.

The results mean McGuinty’s Liberals have 53 seats, one shy of the 54 needed for a majority and the same total they held before the byelections were called.

The Progressive Conservatives are down to 36 seats, while the New Democrats climb to 18.

Appearing at the victory podium with Del Duca in Vaughan, McGuinty conceded that Thursday’s results will force him to work with other parties at Queen’s Park.

Mike Crawley's analysis

CBC Queen's Park reporter Mike Crawley said Thursday’s results are a blow for both Premier Dalton McGuinty and PC Leader Tim Hudak.

"No matter how McGuinty tries to spin it, it is a disappointing result in a byelection he triggered," Crawley reported Thursday. "The Liberals thought they would win and it backfired."

Losing Kitchener-Waterloo — a riding the PCs held for 22 years — will also "raise new questions" about Hudak's leadership, Crawley reported. The big winner on Thursday? NDP Leader Andrea Horwath, who secured a victory many would have thought impossible even two weeks ago.

"Winning a byelection in government is never an easy thing at the best of times and these are not the easiest of times," he said. "We will continue to work with the other two opposition parties, we will continue to find common ground."

Del Duca managed to hold off a challenge from PC candidate Tony Genco. Del Duca previously served as the executive assistant to former Vaughan MPP Greg Sorbara and he worked for McGuinty when he was leader of the Official Opposition.

Fife, the winner in Kitchener-Waterloo, is a former president of the Ontario School Boards Association. Teachers spent the last few weeks actively campaigning in the riding, angry over the McGuinty government's move to legislate a two-year wage freeze for teachers.

McGuinty engineered the byelection in Kitchener-Waterloo by appointing Witmer, the Tory, to a $188,000-a-year post as head of the Workplace Safety and Insurance Board, convincing her to give up the seat she'd held for 22 years.

Progressive Conservative Leader Tim Hudak did not appear publicly Thursday night, but he issued a statement blaming unions for teaming up to help the New Democrats take Kitchener-Waterloo.

"Tonight's result has shown that public sector unions from across Ontario were provided with the perfect opportunity to concentrate their resources and lash out against the wage freeze we've been consistently pushing," said Hudak.

"They bought Kitchener-Waterloo, and now we can expect the rest of Ontario taxpayers to pay for it as the NDP cut more budget deals to keep the Liberals in power."

With files from The Canadian Press