Both sides went into the contest with 100 percent records but it was the holders who looked the more likely. Sweden, who were missing a number of key players, threatened briefly in the first period but trailed 1-0 when Jonathan Toews opened the scoring for the favourites.
Canada pressed home their advantage in the second period when captain Sidney Crosby made it 2-0. Any hopes of a Swedish comeback were killed in the third period when Chris Kunitz scored a spectacular third to ensure the Olympic hockey gold medal returns to Canada for another four years.
Canada's goals came from Sidney Crosby, Jonathan Toews and Chris Kunitz, with the team's goaltender Carey Price
posting the shutout for Canada who became the first country to win back-to-back Winter Olympic Games titles since the Soviet Union in 1988.
It was the second-straight gold medal game where Canadian captain Crosby rose to the occasion.
Crosby scored on a backhand deke to give Canada a 2-0 lead with 4:17 left in the second period after stripping the puck off Sweden's Jonathan Ericsson at the Canadian blueline.
He raced in alone on net and gave Swedish netminder Henrik Lundqvist a shoulder fake one way, then deked the other way and scored.
Lundqvist admitted that Canada had been the better side.
"They were just better. I felt like they were a lot smarter with the puck. I felt like we gave them too many chances. We were leaving the puck in the wrong areas and they were quick to strike," he said.
"Especially in the second period, we had a really tough time to get going. Overall they were just better today."
Sunday's game, in front of a crowd of 11,076 at the Bolshoi Ice Palace, was a matchup of two undefeated teams and the last two Olympic winners as Canada was crowned champions four years ago and Sweden won gold in 2006.
Sweden's silver medal means they end the Olympic Games in 14th spot in the overall table with a total of 15 medals; Two golds, seven silvers and six bronzes.