The win over the Super Swiss came in the second round of the $3.28 million open, the first ATP Masters Series event of the year.
Canas has won 11 of 13 matches this year. His victory Sunday not only ended Federer's hopes of a fourth straight Pac Life title, but also sent the world's No. 1 player to his first defeat since Aug. 16, when Federer fell to Andy Murray in the second round of the ATP Masters Series in Cincinnati.
Federer is still 259-16 since the start of 2004. He would have set a new Open Era record (since 1968) for the longest winning streak (47 matches) if he had captured the title. Guillermo Vilas currently holds the record of 46 matches.