An FEI tribunal said the horse Qalao des Mers, ridden by Maxime Livio, tested positive for a controlled medication substance at the World Equestrian Games in Caen, France, last August.
The substance, Hydroxyethylpromazine sulfoxide, is a metabolite of the sedative Acepromazine - a drug regularly used to treat horses but not allowed in competition.
The FEI said no request had been made to administer Acepromazine to the horse, and no veterinary Form had been provided.
The French eventing team had finished fourth in the Equestrian Games to secure Olympic qualification, with Canada seventh.
The top six - Germany, Britain, the Netherlands, Australia, Ireland and now Canada - secured places in Rio with Brazil earning another automatic slot as host nation.
The FEI said the decision could be appealed against before the Court of Arbitration for Sport within 30 days of the notification of disqualification.
"It is a very proud day for Canada," Equine Canada's high performance director Amie O'Shaughnessy said in a statement.
"We were very pleased to receive notification that the Canadian Eventing Team has been awarded qualification to the 2016 Rio Olympic Games, and commend the FEI’s commitment to upholding the standards of clean sport and equine welfare."
In a separate development, The FEI said the United Arab Emirates had lodged a formal appeal against its provisional suspension from the world body due to infringements in endurance events and horse welfare concerns.
The UAE had previously requested a lifting of the indefinite suspension, which the FEI rejected.
"It is disappointing that an appeal has been lodged and that the UAE National Federation has chosen to go down the legal route rather than seeking ways to solve the issues and make a lasting commitment to improving the welfare of the horse at Endurance events in which it is involved," said FEI Secretary General Sabrina Zeender.
(Reporting by Alan Baldwin, editing by Ed Osmond)
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