While the United States avoided the upset, another of the tournament favorites could not -- the Dominican Republic upset 3-2 by the Netherlands in a Pool D clash in Puerto Rico.
The baseball minnows jumped out to a 3-0 first inning lead against the Dominican's line-up of major leaguers, then held on to claim what was hailed as their greatest baseball victory.
In Tokyo, holders Japan crushed Olympic champions South Korea 14-2 in seven innings to become the first team to reach the second round while China ended Taiwan's hopes with a 4-1 win.
International results for the United States have been less than impressive, with just one Olympic gold medal (Sydney 2000) since the sport was introduced to the Games in 1992 at Barcelona.
Baseball will not be on the London programme in 2012.
After being knocked out in the second round of the inaugural Baseball Classic, the United States arrived in Toronto eager to erase that embarrassment and began by avenging an 8-6 loss to Canada at the 2006 tournament.
But the victory did not come before Canada had sent another scare through the U.S. dugout, battling back from 6-3 down to turn the contest into a nail-biter.
"We owed them a little payback," U.S. manager Davey Johnson told reporters. "We want to redeem what we did three years ago and I think we did a good job doing that.
"They've got a heck of a line-up. They've got some great major league hitters in that line-up. A lot of them. I thought our guys did a good job holding them down."
RAUCOUS CROWD
With a raucous crowd of 42,314 on its feet from the start of the ninth inning, Joey Votto delivered a clutch double into center scoring Russ Martin to trim the U.S. lead to 6-5.
The Americans, however, would not be denied and New York Mets closer J.J. Putz got Justin Morneau to ground out and Jason Bay to fly out to right to end the game.
Jake Peavy, the 2007 National League Cy Young winner, started for the United States and worked three innings, surrendering two runs on two hits, including a towering solo homer to Votto that gave Canada a 2-1 lead.
The Americans gave a display of their power in the fourth when Kevin Youkilis opened the inning with a solo shot and Brian McCann followed with a two-run blast giving the them a 4-2 lead.
Adam Dunn also crushed a two-run homer for the United States, who will next play Venezuela (7-0 winners over Italy) on Sunday.
"We never give up," said Canada manager Ernie Whitt. "Even though we lost today, we know we had to win two games. So we have to win the next two games.
"That is the bottom line. We'll come out Monday, whoever we face, and we'll be ready to win."
In other action, Ivan Rodriguez hit a pair of home runs, including a three-run blast in the seventh inning as Puerto Rico pounded Panama 7-0.
(Editing Greg Stutchbury and Peter Rutherford)
