Very simply, the Conservative party (or whatever it's calling itself these days) got 37.6% of the popular vote and 46% of the seats in the house. The Bloc had 10% of the popular vote, but 16% of the seats in the house. The Liberals, 26% of the popular vote, 24% of the seats in the house. The NDP got 18%, and 12% of the seats in the house.
SOURCE.
As you can see, the house of commons, for a lot of reasons, is not true representation by population, as the greens got 6.8% and they didn't even get a seat.
As a result of the conservatives NOT holding a majority of the seats in the house, they MUST work with the other parties to pass legislation. If the rest of the members of the house of commons got together to vote against the conservatives, even without the coalition, their motions including confidence votes, would not pass. This is essentially what is happening here... but the benefit of a coalition forming is that there's no new election to run, and theoretically no disruption in power.
Remember, at the end of the day, the country keeps running. The government employees do most of the heavy lifting anyway, the elected reps just guide it along.