Statistics Canada says police reported 1,401 hate crimes in 2010 or 4.1 for every 100,000 people, a rate 18 per cent lower than in 2009.
Most of the decrease was a result of a drop in violent hate crimes, which accounted for about one in three incidents.
In 2010, over 95 per cent of hate crimes were motivated by race, religion or sexual orientation.
Just over half of reported hate crimes, or 707 incidents, were related to race or ethnicity, while 395 involved religion and 218 were linked to sexual orientation.
The report said, though, that while the rate of racial hate crimes was down 20 per cent from 2009 and the rate of religion-based incidents was down 17 per cent, rate of crimes linked to sexual orientation was relatively stable.
The report said blacks continued to be the most commonly targeted race or ethnic group in 2010, with 271 reported hate crimes. That's about 40 per cent of all racial incidents.
Arabs or West Asians were the second and third most frequently targeted race or ethnic groups, with each accounting for about 10 per cent of the crimes.
About half of all religion-motivated crimes, 204 incidents, were committed against Jews, although the rate of these crimes was down 38 per cent from 2009.
Hate crimes directed against Muslims were up 26 per cent and crimes aimed at Catholics rose 32 per cent.
Provincially, the highest rate of police-reported hate crime occurred in Ontario, with 5.7 incidents for every 100,000 people. Manitoba was second with 4.6 incidents and British Columbia reported four hate crimes for every 100,000 people.
Newfoundland and Labrador and Prince Edward Island had the lowest rates, with about one incidents for every 100,000 in the population.