The council issued a nationwide call for Muslims to speak out against the remarks, urging imams to condemn the statements in prayer gatherings and urging Canadians to send letters of protest to the Prime Minister's Office.
The call to action comes three days after Harper told CBC that "Islamicism" was the single most pressing threat to the country's security, adding Canada's intelligence service was mostly preoccupied with matters involving Islamic extremists.
Harper's statements are based on gross generalizations that unfairly malign an important demographic, the council said.
"How can Mr. Harper associate Islam with radicalism and fanaticism? These are un-Islamic beliefs and behaviours," the council said in a statement.
"Canadian Muslims do not recognize any person or a group as 'Islamic' if the person or the group are involved in un-Islamic activities."
The council said the timing of Harper's remarks comes just weeks after a strong showing from ethnic communities in Ontario helped propel his Conservatives to their first majority government.
The comments set a dangerous precedent and have the capacity to damage further efforts to root out extremist activity in Canada, it said.
"We are working hard to bring people of all faiths together to fight the extremism and radicalism but Mr. Harper's comments about Islam have damaged those efforts."
Harper's remarks drew condemnation from political circles earlier this week.
Acting New Democrat leader Nycole Turmel accused Harper of creating a climate of fear, describing the Conservative's approach to national security as divisive and damaging.
Interim Liberal Leader Bob Rae also warned against identifying the Muslim faith with terrorism.
"The enemy is not Islam, it's extremism, violence, and hatred," Rae said in a posting on Twitter. "It's the way religious beliefs are twisted and perverted."