Villeneuve, 59, sustained several fractures and reportedly has a punctured lung. He was injured during a qualifying round at the Valcourt ski-doo Grand Prix.
Villeneuve's snowmobile collided with Michael Soucy's while the two were entering a curve.
Both drivers drove off the track and ended up in hay stacks.
Paramedics said Villeneuve's irregular breathing and drop in blood pressure meant he had to be airlifted to the hospital.
Villeneuve was approaching fifth position in the race when the other driver lost control and crashed into his snowmobile.