This result came just hours after their appeal against a six-point deduction was dismissed by the Court of Arbitration for Sport. The penalty was imposed following a drone spying scandal that led to the suspension of head coach Bev Priestman and several staff members.
With zero points to their name despite winning their first two games, Canada needed a win to advance from Group A.
Vanessa Gilles provided the decisive moment, scoring in the 61st minute from a set piece, securing Canadaโs place in the knockouts as the second-place team in the group with three points.
Despite the loss, Colombia also advanced to the quarter-finals, achieving a historic first for the nation by qualifying as one of the best third-placed sides.
Elsewhere, France topped Group A after a 2-1 win over New Zealand in Lyon, thanks to a brace from Marie-Antoinette Katoto.
The striker opened the scoring with a header in the 22nd minute, and after Kate Taylorโs volley equalized for New Zealand, Katoto restored Franceโs lead shortly after halftime, becoming the tournamentโs leading scorer with five goals.
Germany secured their quarter-final berth by defeating Zambia 4-1 in St Etienne.
Lea Schรผller scored twice, and further goals from Klara Bรผhl and Elisa Senss sealed a comfortable win, placing Germany second in Group B. Zambiaโs Barbra Banda scored her fourth goal of the tournament, taking advantage of a German goalkeeping error.
Australia, however, missed out on the knockout stage. A 2-1 defeat to the United States left them third in Group B, with an inferior goal difference compared to the other third-placed teams, Brazil and Colombia.
The United States, already qualified, maintained their perfect record with goals from Trinity Rodman and Korbin Albert.
In Group C, Spain secured their third consecutive victory with a 2-0 win over Brazil, courtesy of goals from Athenea del Castillo and Alexia Putellas.
The match was also notable for a red card to Brazilโs Marta, following a late challenge.
Japan clinched second place in the group after a 3-1 win against Nigeria, with Maika Hamano and Mina Tanaka finding the net for the Japanese side. Jennifer Echegini scored Nigeriaโs only goal of the tournament.
The quarter-finals, set for Saturday, promise thrilling matchups, including Canada versus Germany and the United States against Japan. France will take on Brazil while Spain will trade tackles with Colombia.