Trudeau, 49, took a gamble with his early election call two years ahead of schedule, betting that his handling of the pandemic and Canada's high vaccination rates would deliver him a stronger mandate to rule after the 2019 vote left him with a minority government.
That plan did not go exactly as hoped. The Liberals are projected to win 156 seats in the House of Commons, one more than they had governed with before the vote, according to television projections.
"What we've seen tonight is that millions of Canadians have chosen a progressive plan, and some have talked about the division, but that's not what I see," Trudeau said after his rival conceded. "I see Canadians standing together."
Trudeau will now have to negotiate his campaign promises - including C$10-a-day childcare, billions to seniors’ homes and new climate-linked investments - with the left-leaning New Democrats whose votes will be needed to pass all legislation.
"It seems to suggest exactly what people want, which is some degree of ambivalence....They're not ready to have one party or another really have all the reins," said Gerald Baier, an associate political science professor at the University of British Columbia.
Trudeau, a father of three, comes from Canadian political royalty. Born on Christmas Day 1971 to a sitting Canadian prime minister, Pierre Trudeau, he worked as a teacher and snowboard instructor before winning a seat in parliament in 2008.
He took over a Liberal Party in shambles in 2013 and swept to power two years later on a wave of optimism, promising bold action on issues including electoral reform, cutting greenhouse gas emissions and ensuring clean drinking water for all of Canada's indigenous reserves.
He has not delivered on those big promises in his six years as prime minister but he did introduce a national carbon pricing scheme, welcomed 25,000 Syrian refugees and made Canada the first Western nation to legalise recreational cannabis.
He also won plaudits for introducing a gender-balanced cabinet when he took office in 2015, and spent billions to support Canadians during the pandemic.
During this year's campaign, he faced angry anti-vaccine protesters and a new, disciplined Conservative candidate in Erin O'Toole.
Scandals have also marred his reputation. During the 2019 campaign, photos emerged of a younger Trudeau wearing blackface and he was twice censured for ethics violations during his first term in office.
"He over-promises and under-delivers, and the shine has come off," said Melanee Thomas, political science professor at the University of Calgary.
Apathy toward Trudeau at home contrasts with his popularity on the international stage, where he is still cast as a glamorous leader who inherited former US President Barack Obama's mantle as one of the world's foremost progressive politicians.
Obama endorsed Trudeau last week, as he did in the 2019 election. Their friendship contrasts with a sometimes rocky relationship with former US president Donald Trump, who once called Trudeau "two-faced" after a video emerged that appeared to show Trudeau and other world leaders mocking Trump.
Relations between Trudeau and current president Joe Biden are more harmonious, despite Biden ignoring Canada's objections and revoking a permit for the Keystone XL oil pipeline on his first day in office.