The Ontario court certified the class-action lawsuit in June 2012, but Pfizer sought leave to appeal the certification order.
On Friday, lawyers for the plaintiffs, including Toronto-based firm McPhadden Samac Tuovi LLP, announced a judge has dismissed Pfizer's appeal.
The judge made the ruling in November, but lawyer Bryan McPhadden says it was not made public until now because the two sides were in negotiations over how the class members should be notified.
The plaintiffs allege the drug maker failed to warn Canadians taking the drug that they could suffer psychiatric side effects such as depression, anxiety and suicidal thoughts.
The allegations have not been proven in court.
Pfizer says there is no reliable scientific evidence proving that Champix causes these adverse reactions.
"The court's ruling is procedural only and no ruling has been made on the merits of the claim," Pfizer said in a statement.
"The Company stands behind Champix and Pfizer Canada provided appropriate and accurate information to regulators, physicians and patients about the safety and efficacy of Champix."
The lawsuit represents Canadians who took the drug between April 2, 2007 and May 31, 2010 and suffered certain adverse reactions.