Ontario Provincial Police in Renfrew, Ont., west of Ottawa, say the child had what appeared to be a lighter.
Police were called and they discovered it was actually used to conceal cocaine.
A 21-year-old relative of the child, who is from Renfrew, admitted the cocaine belonged to him, police said.
He has been charged with drug possession and was released on a promise to appear in court on Nov. 13.
The accused’s name has been withheld to protect the identity of the child, police added.