Sinclair, scoring for the second consecutive match since returning from a FIFA suspension, notched international goal No. 145 in the 42nd minute. Jonelle Filigno intercepted a pass before laying it off to Sinclair, who struck the ball into to the bottom left corner of the Dutch goal from 25 yards out.
Canadian goalkeeper Erin McLeod prevented the Netherlands from opening the scoring in earlier in the first half when she saved a penalty shot from Lieke Martens.
"It's mission accomplished for us," said Canada head coach John Herdman. "Our goal was to qualify for the final and we've done so. Erin McLeod made the penalty save and another outstanding save late in the game — that was big for us."
Canada, which previously won the Cyprus Cup in 2008, 2010 and 2011, defeated Finland and Netherlands last week in Group B action. Coach John Herdman's charges outscored the opposition 5-1 in the three matches.
The squad will face England in Wednesday's final, a rematch of the quarter-final battle at the 2012 London Olympics. Canada prevailed 2-0 in that meeting, with Sinclair and Jonelle Filigno scored and McLeod the keeper.
That result set Canada up for the bitterly contested and legendary match against the United States in the Olympic semifinal.
The U.S. on Wednesday will meet Germany in the more prestigious Algarve Cup in Portugal.