Fullback Allysha Chapman scored the winning goal five minutes into the second half, marking her first with the national team.
"When it happened, I was in a little bit of shock," said Chapman. "I saw (Melissa Tancredi) coming off the front and she made great spin turn. I was under-lapping her and hoped she could get that touch to me. She saw me and put it through and I just slammed it on net... I wasn't expecting to score, but I am really happy."
The 3-0 Canadians, who are tuning up for this summer's Women's World Cup, will face England in the championship game Wednesday.
In the first half, Canada struggled to sort out Italy's system. A change in the second half made the difference, said coach John Herdman.
"Both teams put each other under immediate pressure, but we started slow," said Herdman. "I had to change the structure at halftime as the shape we set up with (in the first) didn't really cope well with their diamond formation. The change at halftime changed everything and we were able to get a goal quite quickly."
The backline is critical to Canada's game so Herdman was happy to see Chapman step up.
"We've said the fullbacks are going to be important," said Herdman. "It's great to see. That's the modern fullback and that's what we need from her (Chapman) and we need more of that from our fullbacks in international games.
"I'm really proud because she put a great shift in defensively and to get in on the end… and what a wonderful finish it was."
Canada's third match of the tournament deviated from the formula of its first two games. Herdman changed the starting lineup by putting Stephanie Labbe in goal and Adriana Leon and Jonelle Filigno on the front line.
"We wanted to freshen some people up for the final, but we also wanted to keep some consistency," said Herdman. "And we wanted to give Leon and Filigno, who have been training very well, that opportunity to come in and start a game and get that experience because that's what this team is about.
"We're about the chemistry and it's important we keep building those partnerships and relationships between the players."
Herdman is confident going into the final.
"It's important because it's another big game and it gives us something absolutely to play for," he said. "It's tournament experience, this is like a knock-out game in a World Cup, and we get drawn with England, who is one of the dark horses for this summer's tournament, so it's going to be a heck of game."