You have to look at all the parties and how they traditionally align to understand what happened. We have two very far left parties (green and NDP),a fairly far left party (Liberals) that is historically closer to center left a center right party (conservatives) and in quebec a quebec nationalist party (bloc). What we had this election was a massive move to center right with a big upswing in conservative votes and at the same time we had an utter collapse of the far left NDP and green party vote which mostly went liberal and a softening of support for bloc in Quebec that mostly went liberal. So the conservatives captured a percent of the popular vote that would have been a staggering majority at any other time and still lost because the concentration of the very far left vote into the liberals overwhelmed it.

I would also say the liberals have not moderated a bit, they just said and did some disingenuous things to trick people into thinking this guy was more like Chretien, when his books read like the green party mixed with greed. Time will tell if this view proves correct or not.