South Africa's Tim Clark shot a final-day 65 to snatch a victory away from American Jim Furyk at the Royal Montreal course on Sunday, earning his second PGA title.
McDowell began his round solidly before bogeying the third, but he recovered with birdies at four and eight.
The back nine began with par, but he rallied with birdies on 15 and 17 to secure the top 10 spot.
However, Furyk led by three shots going into the last round as he sought a third Canadian Open crown, but the veteran could only card a one-under-par 69 to open the door to nearest challenger Clark.
And the 38-year-old took full advantage with a five-under round that saw him come back in just 30 - thanks to a superb spell of putting - to finish on a 17-under total of 263, equalling the tournament record, and one shot clear of Furyk.