Mary Fowler got the home side off to a perfect start when she scored in the third minute at Allianz Stadium, but Australia were punished for failing to capitalise on their first-half dominance.
A well-taken second-half brace courtesy of Adriana Leon gave Canada victory and raised more questions about the cohesion of the Matildas less than a year out from a World Cup on home soil.
It means Gustavsson has won just 18 games against teams ranked in FIFA's top 20 at present.
It will have been a frustrating defeat for Football Australia, who have said the coach's position is not in jeopardy, because for the first 45 minutes the Matildas produced one of their best displays in recent memory.
Kerr's intense pressing allowed Fowler, Vine and Caitlin Foord to play pivotal roles and helped ensure Canada didn't have a single first-half shot on target.
Foord and Vine were both unlucky not to have added to Australia's tally before the half-time break.
The best chance fell to Vine, who was unable to turn in a delightful Fowler ball threaded through the Canada defence.
But as has become customary with the Matildas under Gustavsson, there is a yin to the yang and the second-half response was way off the pace.
Christine Sinclair made a break down the Australian left in the 48th minute and while her first cross ricocheted off Polkinghorne, her second found Leon.
The Manchester United forward, who scored the only goal in Canada's 1-0 win in Brisbane last Saturday, slotted past Lydia Williams with ease.
The Matildas' off-the-ball work evaporated and they were fortunate that Nichelle Prince had a goal ruled out for an offside.
Leon added a second but it was the nature of how she scored that will have been the most alarming.
Defender Jade Rose picked the ball up deep, waltzed through the Australian midfield and threaded a crisp ball behind the hosts' defence for Leon to tuck away after the hour mark.
Australia desperately scrambled to find an equaliser late on but none was forthcoming and they will need to be much improved against Gustavsson's native Sweden in November.