Despite that disappointment, the Americans still ended the two-day competition in Nassau with the most gold medals, five.
A strong leg by Olympic silver medallist Andre De Grasse and a solid exchange with anchor Aaron Brown put the Canadians out front in the men's 4x200 and Brown raced home for the year's best time of 1:19.42.
Brown said the team had been determined to make up for a dropped baton that knocked them out of Saturday's 4x100.
"It did not go well yesterday," said Brown. "But I'm glad we were able to break the curse, get the monkey off our backs and show the world what we are able to do in the relays."
The win, the first in the event by a non-U.S. or Jamaican team at the World Relays, came after Canadian leadoff runner Gavin Smellie was called for a false start in the heats.
“There was maybe a little twitch, but I didn’t move,” said Smellie. “I was asking the officials to watch the video to see there was no false start.”
The officials agreed and the red card was withdrawn.
The United States, running without Justin Gatlin, were second in the final in 1:19.88 and Jamaica took third (1:21.09).
In the women's 4x100, anchor Rebekka Haas held off Jamaica's Sashalee Forbes to give Germany their first World Relays victory in 42.84 seconds
"We were just hoping to get a medal, but we got gold," said German leadoff Alexandra Burghardt.
The United States won three of Sunday's other finals.
Olympic bronze medallist Clayton Murphy outdueled Kenya's Ferguson Rotich in the men's 4x800 as the United States came home in 7:13.16 with Kenya running 7:13.70.
Olympian LaShawn Merritt anchored the Americans to a narrow victory over Botswana in the men's 4x400, the Americans winning in 3:02.13, just 0.15 seconds ahead of Botswana.
There was no such drama in the women's 4x400 where the Americans came home in 3:24.36, nearly four seconds ahead of Poland.
"These ladies blew that thing open for me," said American anchor Natasha Hastings.
Host Bahamas finally struck victory in the finale of the night, the mixed 4x400, in 3:14.42.
The top eight finishers in the 4x100 and 4x400 for men and women automatically qualified for the IAAF world championships in London in August.
(Reporting by Gene Cherry in Raleigh, North Carolina; Editing by Peter Rutherford)
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