Needing to finish in the top four of the eight teams competing in the 02 Arena, Canada wound up fifth by 0.5 points on Tuesday.
The British men won the final qualifying meet, blowing away its rivals with a commanding score of 358.227 in front of its own fans in southeast London.
France was second — 7.568 points behind Britain — with Spain and Italy completing an all-European set of qualifiers.
Canada scored 345.892 to finish just behind the fourth-place Italians (346.334).
"It's extremely disappointing to come so close to qualifying and then not make it," said Canadian program director Jeff Thomson. "But there were a number of significant mistakes and those mistakes meant we didn't make it."
Canada's team included Nathan Gafuik of Calgary, Edmonton's Brandon O'Neill and Jackson Payne, Ken Ikeda of Abbotsford, B.C., Casey Sandy of Brampton, Ont., Kevin Lytwyn of Stoney Creek, Ont., and reserve Jayd Lukenchuk of Saskatoon.
The last-chance qualifying event — also a test event for the London Olympic venue — was for countries that didn't finish in the top eight at the world championships. Canada finished 12th at the world championships in Tokyo.
Canada lost four members of its 2008 Olympic team to retirement, including 2004 gold medallist Kyle Shewfelt of Calgary.
"I don't believe there's a single country in the world except the top three — China, Japan and the U.S. — that could lose four super gymnasts all at once as happened to our team after Beijing and still be this close to making it to the Olympics," Thomson said.
Canada's women will compete for one of the last four Olympic full-team berths on Wednesday.