The Scuderia Ferrari driver secured the Italian team's first pole position around the Circuit Gilles Villeneuve since Michael Schumacher in 2001, with Vettel putting in an incredible lap time in an intense qualifying session.
The Englishman, who arrived in North America with a 14-point lead over Vettel, will now head to the next round in France trailing his Ferrari rival by one point. But the number that will matter to Vettel is the one-point advantage he leaves Canada with.
After securing his third win of the season, he explained that he was concerned the error could have led to a risky situation for fans and marshals at the circuit. Mercedes were also due to bring a new engine but put it back to the next round in France after concern over quality issues and the Scuderia were able to make the most of their advantage. "And for Scuderia Ferrari this track and this country means a lot, as this is the place where Gilles Villeneuve came from".
"Well he's lucky because in our sport, memory is very, very short and it takes just one good race for everybody to forget everything else that happened", Rosberg said.
Hamilton retains a slim lead over Vettel in driver standings and will likely challenge the German when racing begins in earnest.
Vettel carried on anyway, but the race result was decided on a countback to Lap 68 according to the rulebook. He converted his storming run for pole into victory with absolute precision.
"Obviously it was important to open the gap straight away".
It meant Hamilton, along with Valtteri Bottas and the Force India/Williams drivers, remained with their original spec engines.More news: Pep Guaridola Finally Responds To Yaya Toure's Racist Allegations
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But the four-time world champion said it could have been worse.
Hamilton, who had a hard weekend, was unable to find the performance he wanted.
Lewis Hamilton has topped the grid on six occasions in Montreal, but he'll start from fourth place on Sunday.
"I was just anxious, I told them also on the last lap, then people don't jump on the track, waving flags and celebrating, because we're still going at full pace". Hamilton has won the Canadian race six times, including the previous three.
They also had problems with tyres choice and wear management. Mercedes, Ferrari and Red Bull have dominated the field this season.
Fernando Alonso had no reason to celebrate his 300th grand prix, forced to retire his McLaren on lap 43 and the Spaniard will doubtless be pleased to leave Canada to focus on taking part in the Le Mans 24 Hours next weekend.
Ferrari's Kimi Raikkonen was sixth, and said it had been a boring race, with Renault's Nico Hulkenberg and Carlos Sainz seventh and eighth.