The handful of members of Pegida's Quebec chapter were shouted down by several hundred protesters who chanted anti-Islamophobic statements to protest what they describe as the group's racist agenda.
The PEGIDA supporters told police the event was cancelled soon after it was scheduled to begin.
The jubilant counter-protesters waved banners and balloons as they marched through Montreal's immigrant-heavy Little Mahgreb neighbourhood.
PEGIDA, which was founded in Germany, established a Quebec chapter earlier this year.
Police say although the PEGIDA counter-protest was not legal, officers did not shut it down
Police say no arrests were made and no tickets were issued.
One person was taken into custody as a preventative measure.