Team Canada finished the preliminary round in second place in Group B after a 3-1 loss to the United States on Saturday at Air Canada Centre in Toronto, Ontario.
The U.S. came out strong and capitalized on two power-play opportunities in the first period to claim a 2-0 lead just 6:04 into the contest.
Thomas Chabot got Canada to within one score midway through the second period as he blasted a rebound from the backside of the net past goaltender Joseph Woll during a 5-on-3 power play.
Canada gained a new sense of confidence after Chabot's goal and was aggressive down the ice, but it could not find the equalizer. The U.S. withstood the pressure and forward Jeremy Bracco lit the lamp on a rebound before the middle frame ended to extend the Americans' lead back to two..
Special teams was the difference in the end, as Canada was only able to score on one of its six man advantages. Canada still has the best power-play percentage in the tournament, converting on 47.37 percent of its chances (9-for-19).
Colorado Avalanche prospect Tyson Jost of Canada recorded three shots on goal and also had two penalty minutes.
Team Canada will battle the Czech Republic on Monday at 6 p.m. in the quarterfinals.
SWEDEN (5) VS. CZECH REPUBLIC (2)
Jonathan Dahlen scored three goals and Team Sweden remained undefeated through the preliminary round as it won 5-2 against the Czech Republic at Bell Centre in Montreal, Quebec, on New Year's Eve.
Sweden won Group A with 12 points and secured the top spot in the quarterfinals on Monday against Slovakia. The squad has won 40 consecutive group games at the World Juniors and looks to maintain its perfect record in hopes of winning the country's first gold medal at the tournament since 2012.
Colorado Avalanche goaltending prospect Adam Werner did not dress in the match for Sweden.