Brett Lee and Shaun Tait took six wickets between them to script a Canadian collapse where they lost their last eight wickets for 61 runs after being given a good start by their top order in the Group A encounter at M Chinnaswamy Stadium here on Wednesday.
Lee was the tormentor-in-chief taking four wickets for 46 runs while Tait had figures of two for 34.
After winning the toss and batting first, Canadian opener Hiral Patel launched a spirited assault on Australian bowlers but Lee picked John Davison for 14.
That, however, didn't alter Patel's intentions who went on to complete a blazing half century. Shane Watson then brought Australia back with Patel's wicket after the Canadian had scored a quickfire 54 from 45 deliveries that put Canada in a solid position.
Skipper Ashish Bagai and Zubin Surkari then built on the terrific start provided by Patel and kept their scoreboard ticking by milking the Australia spinners.
However, Bagai's (39) dismissal led to a mini collapse where the Canadians lost Surakari (34), Jimmy Hansra (3) and Rizwan Cheema (2) in quick succession.
Tait broke the 68-run partnership between Bagai and Surkari when he got the Canadian skipper to edge one for a simple catch to Brad Haddin.
Jason Krejza then got Hansra caught in the deep, followed by Surkari and Cheema's wickets, who were scalped by Tait and Lee respectively.
Earlier, Australia decided to go in with the same team that beat Kenya.
The reigning champions have already qualified for the quarter-finals with an unconvincing 60-run win against Kenya and a win here will take them to the top spot in Group A after five games.
On the other hand, Canada hope to give a spirited performance against Australia keeping in mind that they have nothing to lose.
The match offered 40-year-old John Davison his first chance to play against his country of residence in his final World Cup game.
Davison, who famously hit a scintillating 76-ball 111 against West Indies in 2003, was born in Canada to Australian parents and has had spells playing for Victoria and Western Australia.