The 33-year-old from Weyburn in Saskatchewan jammed his thumb when he hit a tee shot on the 12th hole during Thursday's opening round at Glen Abbey.
DeLaet managed to finish with an even-par 72 and said he was hopeful that he could play through discomfort in the second round, despite experiencing pain on his takeaway.
However, the world number 84 lasted just four holes on Friday before deciding to quit.
"It's an important tournament to me, obviously," DeLaet said in a statement. "I guess when it all came down to it, if I felt I could compete and still hit the ball well, probably I would have kept going.
"But I just didn't have any kind of golf game out there today and then it was hurting."
Fellow Canadian David Hearn, who rocketed up the leaderboard with an eight-under-par 64 in the second round, is well aware of the importance of the Canadian Open to DeLaet.
"That's got to be tearing at his heart strings not being able to finish his round," Hearn told reporters.
"I know how much this tournament means to every Canadian in this field and how much it means to Graham. I just hope he gets healthy again, soon."
The Canadian Open has not been won by a home player since Pat Fletcher triumphed in 1954.
As DeLaet recovers from his thumb injury, he has his sights set on several big events before the end of his 2015 campaign.
"I've still got the PGA (Championship) coming up here in a few weeks and a couple (of) playoff events before the decisions on the Presidents Cup," he said. "I want to try to be healthy and make a good run with that team."
The PGA Championship, the final major of the year, will be played at Whistling Straits in Kohler, Wisconsin from Aug. 13-16.
The Presidents Cup, which pits a 12-man team from the United States against a line-up of international players from outside Europe, will be staged for the first time in South Korea, from Oct. 8-11.
DeLaet made his Presidents Cup debut for the Internationals in 2013 at Muirfield Village in Dublin, Ohio where he finished with an impressive 3-1-1 record.
(Editing by Mark Lamport-Stokes)
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