Both players looked strong on serve during early exchanges in the semi-final, with Ranoic first to seize an advantage as he broke Pospisil's serve in the fifth game.
The Canadian number one maintained a consistent rhythm on serve to close out the first set 6-4, but immediately came under pressure from his opponent in the second set.
Pospisil blew a pair of break-point chances bur eventually made his aggression count, breaking twice in quick succession to claim the second set 6-1 in 31 minutes.
Raonic decided to take a seven-minute bathroom break to regroup before the deciding set, much to the annoyance of a vocal crowd in Montreal.
Despite a series of baseline winners from Pospisil, neither could force a breakthrough in the third set, sending the match to a deciding tie-breaker.
With the pressure increased, qualifier Pospisil finally buckled, conceding two match points as unforced errors crept into his game at just the wrong time.