Finland, the reigning gold medallists from Beijing 2022, will now contest the bronze medal game, while the Canadians can look forward to Sunday's final, where they will meet either the United States or Slovakia.
The match began with both sides willing to show attacking intent and putting the goaltenders under pressure. Finland gained the first advantage midway through the first period when Canada were guilty of too many men on the ice, but they failed to find a way past Jordan Binnington.
A save with the helmet from Juuse Saros denied a quick strike from MacKinnon as Canada appeared to be gaining the upper hand, until just over three minutes to go in the first, when Sam Bennett clattered into Saros and was called for goaltender interference.
But Bennett was in the penalty box for all of three seconds, as Sebastian Aho won the face-off and pulled the puck back for Mikko Rantanen to rifle first time past Binnington and into the top corner to give Finland the lead.
Canada came out for the second period all guns blazing, and the pressure appeared to be getting to the Finns and Aho, who was penalised for interference to hand the Canadians their first powerplay.
Joel Armia managed to poke the puck out of his zone to relieve some pressure, but quickest to react was Erik Haula, who raced onto the puck from the left, closed in on Binnington and beat the goalie with a nice backhand finish to score shorthanded and put the Leijonat 2-0 ahead.
MacKinnon continued to be Team Canada's biggest threat in attack, but he and his teammates were struggling to break Saros' resistance as the game ticked past the midway point.
But the nine-time gold medallists finally found a route back in with under six minutes left in the second period, after Anton Lundell was called for high-sticking, Cale Makar took a shot from distance which deflected off the stick of Sam Reinhart and completely wrong-footed Saros as it flew in to the net.
The Finnish net continued to come under fire before the 40-minute mark, by which point the shots on goal count was 22-11 in Canada's favour, but Finland still led 2-1 after Saros thwarted a Connor McDavid shot when scrambling back into position.
Jon Cooper's side were struggling to get their shots off against a resolute Finnish defence early in the third, as Binnington kept their gold-medal hopes alive with a big save to deny Lundell after six minutes.
But that chance only spurred the Canadians on, whose pressure eventually became too much for Finland with just under 10 minutes left, as Makar grabbed a second assist by squaring to Shea Theadore, whose effort from the point evaded traffic and was in the net before Saros could react.
Canada had the chance to complete the turnaround in regulation, as Mitchell Marner danced his way through the Finnish defence in the final five minutes, only for Saros to deny him with his pad.
Finland had to make one final stand when Niko Mikkola was called for high-sticking with only 02:35 left in the game, but after denying McDavid and Macklin Celebrini, they finally capitulated with two seconds left in the powerplay, as McDavid found MacKinnon on the left, and his shot squeezed past Saros at the near post.
Head coach Antti Pennanen challenged the goal, believing the officials had missed an offside in the build-up, but following a review, the goal stood and Canada led with 35 seconds to go and with a man advantage following the failed challenge.
Finland rallied late on, but Canada held out to return to the Olympic final after a 12-year absence. The Leijonat will return to PalaItalia for the bronze medal game tomorrow, while Canada will play for gold on Sunday.