Wales made promising start but Canada secured four-try bonus and led 28-0 at half-time thanks to McKinley Hunt's double and scores by Alysha Corrigan and Asia Hogan-Rochester.
Welsh number eight Georgia Evans yellow-carded for a high tackle in 48th minute, followed by Taylor Perry and Brittany Kassil going over for Canada.
After heavy loss to Scotland in opening match, Wales were nilled and are set for a group-stage exit.
Canada, ranked second in the world, have shown their credentials as challengers for the trophy by cruising past Fiji and Wales.
Live Reporting
Thank you and goodbyepublished at 14:20 BST 30 August
14:20 BST 30 August
FT: Canada 42-0 Wales
Image source, Getty Images
Wales will have to wait a couple of hours for official confirmation their World Cup knockout dream is over.
If Scotland pick up a match point against Fiji in the second game of a Pool B double-header in Salford, Sean Lynn's side will be out of quarter-final contention.
Wales improved in the Canada loss after the horror show against Scotland in the opening match.
It was that 38-8 loss to Scotland that is set to cost Wales in this global tournament and will haunt this squad.
Wales face Fiji in Exeter next Saturday afternoon in what could be a dead rubber for both sides.
Thank you for joining us today and you can keep up to date with Scotland's game against Fiji on the BBC sport website with the match starting at 14:45 BST.
Wales gave glimpses of what I want - Lynnpublished at 14:16 BST 30 August
14:16 BST 30 August
FT: Canada 42-0 Wales
Image source, Huw Evans Picture Agency
Wales head coach Sean Lynn told BBC Sport: "In the first 15 to 20 minutes we could see the physicality side of it, I saw improvements, and that's what I wanted.
"When I went in at half-time I told the girls 'just empty those tanks in the next 40 minutes'.
"The big thing for me was that in the last 15, 20 minutes there was a glimpse of what I want to see, being brave, moving the ball and getting individuals with the ball in hand.
"We knew today was going to be a big ask, you look at Canada and just the way they move the ball, they're an offloading team, but I'm super proud of our girls.
"I asked for a positive reaction and that's something we got. Everything we did out there I was very impressed with and we've got to move forward with small steps.
"I'm a proud Welsh man and I'm coaching at the World Cup. I'm relishing it and I feel that with this squad of players that we've got, we can be moving forward very soon."
Canada captain Alex Tessier told BBC Sport: "I think we were very dominant in the set-piece, it was amazing to watch our girls dominate the scrums and the lineout was still strong for us.
"We knew what to expect [from Wales], we knew they were going to be physical, especially around those breakdowns which we didn't react quickly enough, but we kept our composure and managed to score back-to-back tries.
"The girls are taking it one game at a time, next week we know we're going to face the beautiful team of Scotland.
"So we're going to fine tune what we didn't do today, and put on another good performance."
Wales captain Bethan Lewis told BBC Sport: "It is a massive disappointment especially after last week, but I do think we came out firing in the first 15 minutes and that shows a bit more of what we are and the pride we want to show.
"We are disappointed but we've got another game to keep pushing on.
"We wanted to bring that physicality, Bryonie King in the first moment of the match turned the ball over, that's what we want to do and we want to do it more consistently We just have got to keep going forward now.
"That's what we wanted to be a bit more connected this week and I think we did that We've got to stay connected, brush ourselves off and go again.
"The nature of the tournament means you can't dwell on things too long, we have to review but we have to keep going forward.
"We want to be physical again next week and I'm sure we'll be working on that this week.
"I am proud of the girls for what we've put in today but we've got to go again next week."
I am super proud of those Wales girls, they absolutely took their opportunity here.
They conceded four tries in the first half, they were right up against it, yet in the second half they only conceded two and only when they were a player down.
We wanted effort and bravery and that is what we got.
I was gutted they didn't get some points but the fact they put such a performance in, with regards to their effort, that is something to hang their hat on.
It was a hugely impressive display from Canada from 1-15 and the impacts off the bench.
The forwards worked, the gain line worked, the offloading, the moving the ball to the edge and the accuracy was all there.
That was a very good performance by Canada today.
I am pleased that Wales showed fight. They had some opportunities and they seemed hungrier than last week, so I am pleased with that bounce from Wales.
Full-time - Canada 42-0 Walespublished at 13:49 BST 30 August
13:49 BST 30 August
Image source, PA
Perhaps the expected scoreline from Salford as Canada overwhelm Wales and all but dump Sean Lynn's side out of the World Cup.
After a heavy loss to Scotland in opening match, Wales are staring at a group-stage exit.
That will come later on today if Scotland get any match points from their game against Fiji.
Canada showed their credentials as challengers for the World Cup trophy as they demonstrate why they are ranked as the second best side in the world.
Wales made a promising start but Canada secured four-try bonus and lead 28-0 at
half-time thanks to McKinley Hunt's double and scores by wings Alysha Corrigan and Asia Hogan-Rochester.
Welsh number eight Georgia Evans was yellow-carded for a high tackle in 48th
minute, which was followed by Taylor Perry and Brittany Kassil going over for Canada.