Federer, who was beaten by Raonic in the semi-finals last year, took just over two hours to claim a 6-4 6-2 7-6(4) victory in his quarter-final encounter.
The 18-time Grand Slam champion put pressure on his opponent's serve early on, and his approach paid off when he nabbed the one and only break point of the first set.
Federer carried his momentum into the second set as he broke Raonic's serve at the first time of asking, and converted a third break point to give himself a comfortable 4-1 lead.
After wrapping up the second set, Raonic began to come into his own, creating five break points in total, but failing to take a single one.
The Wimbledon fan favourite struggled to trouble the Canadian's serve, but in the tie-break, the experienced professional came from 3-0 down to take the set and the match.
Federer will face Tomas Berdych in the final four.