Ri Un Sim scored in the 78th and 87th minutes, her sifth and sevent goals of the tournament, to stake North Korea to a 2-0 lead. Nichelle Prince tallied in injury time, but Canada became the last of CONCACAF's three teams to be eliminated.
Both sides had chances in the first first half, during which North Korea made two substitutions, but Canada was the first to seriously threaten when Summer Clarke took a feed from Prince and hit the crossbar in the 61st minute.
North Korea replied almost immediately, but Canadian keeper Kailen Sheridan denied chances by Ri Kyong Hyong and Choe Yun Gyong.
The Koreans finally went ahead when Ri Un Sim scored for a fourth straight game, heading in Ri Hyang Sim's cross from the right at the back post.
Ri Un Sum tacked on a needed insurance goal nine minutes later, capitalizing on a loose ball in the penalty area.
Prince tried to rally Canada with a 20-meter drive in the 91st, but the North Americans joined the United States and Mexico, who were eliminated in the first round.
The quarterfinal appearance equaled Canada's best showing at the tournament, matching their 3-2 loss to Germany in the 2008 knockout round.