The jet, flown by Capt. Brian Bews, lost thrust in its right engine while doing a manoeuvre about 90 metres above the ground at the Lethbridge County Airport in July 2010.
The plane didn't respond and Bews was forced to eject seconds before the CF-18 crashed and exploded in a massive fireball.
He suffered three compressed vertebrae.
The Royal Canadian Air Force says a number of factors contributed to the crash, but it pointed specifically at the piston.
"The engine malfunction was likely the result of a stuck ratio boost piston in the right engine main fuel control that prevented the engine from advancing above flight idle when maximum afterburner was selected," says the report.
"The large thrust imbalance between the left and the right engines caused the aircraft to depart controlled flight and the aircraft was unrecoverable within the altitude available."
The Air Force says it is improving its air show training program and has expedited a program to upgrade the main fuel controls of all CF-18s.
As a result of the crash, the CF-18 demonstration team cancelled its six scheduled appearances in Canada and two in the United States under orders of the North American Aerospace Defence Command.
Bews told reporters a few weeks after the crash that he knew instantly something was wrong.
"It became immediately obvious to me that the jet was not acting like it normally acts,'' Bews said at the time. "I was not in control of the aircraft anymore.''
Bews wrestled with the jet for a few seconds before it looked like it was about to spiral toward the ground.
"I knew where the jet was going and I didn't want to be there with it, so I knew my only chance of survival was to pull the ejection handle.''
The ejection went smoothly, but when Bews landed the parachute shroud lines became entangled around his left leg and the parachute re-inflated before it could be released, causing him to be dragged several hundred metres.
"The pilot untangled the shroud lines from his leg and rotated onto his stomach while continuing to be dragged, now head first," the final report says.
"At the same time, members from the Sky Hawk Parachute Demonstration Team were chasing the pilot in their vehicle and, as they managed to catch up with the parachute, the pilot was able to release the right Koch fitting. One of the Sky Hawks jumped from the vehicle and assisted the pilot by deflating the parachute and other Sky Hawks members performed immediate first aid."