The 33-year-old world number two's withdrawal was announced in a press release, with reports citing "scheduling issues" for the pullout.
"I am disappointed that I won't be playing in Montreal because it's a tournament and a city that I really enjoy and has incredible fans," the Swiss star said, adding that he hoped to return to the tournament in the future.
Federer, beaten in the Wimbledon final earlier this month, is a two-time winner of the Rogers Cup when it was staged in Toronto in 2004 and 2006.
He also finished runner-up last year to Jo-Wilfried Tsonga.
Jerzy Janowicz of Poland was named to replace Federer in the main draw.
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