The man was identified as Nishant Fozdar Jagdeep, 25, and the American as Alicia Perrien, 23. Authorities haven't said where they were from.
Peruvian police said the incident happened on Tuesday when a group of 13 tourists and three local guides were on a rafting excursion along the Vilcanota River, in the Cuzco region. Police said Fozdar Jagdeep was the only Canadian on the raft.
Police from the town of Quillabamba told the CBC's Evan Dyer two rafts capsized and all 16 people ended up in the water.
River turbulent when rafters set out
Fourteen of the people were able to pull themselves out of the water or were rescued, but police said Fozdar Jagdeep drowned before he could be rescued. Perrien was carried downstream. Her body was recovered Wednesday, police confirmed.
The Cuzco region is a popular destination for tourists and is the home of the Inca citadel of Machu Picchu.
Police said the Vilcanota River is quite swollen and turbulent, as is normal at this time of year, the beginning of the area's rainy season.
A spokesman with the Department of Foreign Affairs and International Trade said consular officials in Lima, Peru, are in contact with local authorities and providing assistance to the family of the Canadian.