The Finn was ninth after a difficult race as Red Bull's Mark Webber took fourth.
“It was a very important race for us to win - finally we get it off the list and I'm very proud of that”
Raikkonen was lapped before half distance by Vettel, whose performance revived memories of many of his
dominant wins in 2011.
The three-time world champion was in a league of his own, building a 2.8-second lead after two laps and driving off into the distance.
"Great race. I had a very good start and then I was able to really go with the car," said Vettel. "On the super-soft we saw the tyres were falling apart but we were as good as everyone else and I was able to build a gap.
"A very important race for us to win - finally we get it off the list and I'm very proud of that. Great car by the team and we were able to pull away from the rest and control the race."
Vettel lost the lead only for three laps after making his first stop earlier than Hamilton, but was a pit-stop's margin - 15 seconds - ahead of the Mercedes before half distance.
He had only two scares - a brush with wall on the exit of Turn Four early in the race and an off-track moment at Turn One on lap 52, which cost him four seconds.
Vettel's advantage in the championship is now equivalent to more than a clear win and fifth place, underlining his position as a clear favourite to win his fourth consecutive world title.
Hamilton trailed Vettel from the start, initially from team-mate Nico Rosberg, who held off Webber and Alonso through the first stint.
Alonso & Hamilton battle in Canada
But after Mercedes chose super-soft tyres for the German's second stint while Webber and Alonso fitted the more durable mediums, he came under increasing pressure.
Webber finally passed the Mercedes into the final chicane on lap 30, with Alonso following him through at Turn One on the next lap.
The Australian then suffered front wing damage when tangling with the Caterham of Giedo van der Garde when he lapped the Dutch, who received a 10-second stop-and-go penalty for the incident.
The collision cost Webber some front downforce and Alonso was able to pass him into Turn One on lap 42.
Webber made his final pit stop for fresh tyres a lap before Alonso, with the Spaniard coming in the following lap.
They rejoined with Hamilton six seconds ahead of Alonso and Webber four seconds down on the Ferrari.
Initially, the trio began to close up but as Alonso piled on the pressure trying to close on Hamilton, Webber dropped back, leaving the battle for the final two podium places to the former McLaren team-mates.
Alonso, benefiting from the Ferrari's better tyre usage, closed in on Hamilton and finally passed him using the
DRS overtaking aid
on the pit straight heading into lap 63.
"We didn't have a good qualifying," said Alonso. "I didn't put a lap together but we knew the pace of the car in dry conditions was good. So we had some hopes.
"We are fighting with top drivers and I had a very good fight with Nico, Mark and Lewis. It's not easy, even if you have a bit more pace they are super-talented. But we scored some good points after a difficult weekend."
Hamilton fought back against Alonso, but had to settle for third.
"We had a good battle," said Hamilton. "He was very fair. I hope we can get a bit more pace in the next race. We just need to keep pushing to close the gap to these guys."
Webber was fourth as Rosberg fell back to finish fifth, ahead of an impressive Jean-Eric Vergne in the Toro Rosso, who gained one place on his career-best seventh place qualifying spot.
The Frenchman made a final stop at the same time as Force India's Paul di Resta, trying to cover the Scot who was on a one-stop strategy.
Di Resta took seventh and team-mate Adrian Sutil was on course for eighth before being given a drive-through penalty for holding up Hamilton as the Mercedes driver tried to hold off Alonso and dropped to 10th.
Raikkonen struggled for pace with his Lotus on a one-stop strategy and was passed for eighth by Ferrari's Felipe Massa on the penultimate lap.
Williams driver Valtteri Bottas, who starred in a wet qualifying to take third on the grid, dropped back to 14th in the uncompetitive Williams.
Following the race, governing body the FIA said in a statement it was "sad to announce the death of a Formula 1 Grand Prix du Canada circuit worker.
"The worker was the victim of an unfortunate accident that occurred at the end of this afternoon's Formula 1 Grand Prix. The worker was helping to recover a car which had stopped during the race.
"The recovery vehicle had lifted the car to return it to the pits and while doing this the worker dropped his radio and attempted to pick it up. As he did this, he stumbled and was hit and run over by the recovery vehicle.
"The worker was transported via helicopter to hospital. Unfortunately, the worker succumbed to his injuries at the hospital."
Alonso led the tributes to the marshal who died. The Spaniard
"Today there is nothing to celebrate. Terrible news arrives with the death of a marshal this race. Very sad. RIP."
Vettel said: "It is very, very sad to hear that a marshal tragically lost his life today in Canada. The work of marshals is not always seen but it is vital to our sport and without their commitment, time and dedication there would be no motorsport. I am very, very sad to hear this news and my thoughts are with his family and friends."
"Shocked and saddened by the news that a marshal who is there to keep us safe has lost his life during our race today. Rest in peace my friend."
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