A day after losing 22-0 to Britain in the pool stage, the third seeds ran riot in the first half with tries from Karen Paquin, Ghislaine Landry, Bianca Farella and Kelly Russell.
Danielle Waterman replied for Britain and speedster Jasmine Joyce cut the deficit further in the second half but they were unable to cope with Canada's physicality and Landry ran in her second try to seal the victory.
Rugby was last included at the Olympics in Paris in 1924 when the United States beat hosts France in the final of a men's 15-aside tournament.
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Australia and New Zealand will face off for the women's gold medal later on Monday. The men's tournament begins at the Deodoro Stadium on Tuesday.
(Reporting by Nick Mulvenney, editing by Greg Stutchbury)
