New Zealand scored a mammoth 358 for 6 in their 50 overs and it proved too much for the minnows, who never looked remotely like challenging the target and ended on 261-9 after their 50 overs.
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Canada were in a perilous position at 4-2 before captain Ashish Bagai (84) and Jimmy Hansra (70 not out) came together to put on 125 for the fourth wicket and give the scoreboard a look of respectability.
Veteran John Davison was dismissed in bizarre fashion, run out by a direct hit from wicket-keeper Brendon McCullum as he ambled a single when he was in no danger.
Kyle Mills did the early damage for the Black Caps, dismissing Ruvindu Gunasekera and Zubin Surkari with just four runs on the board but he had to leave the field injured midway through his third over. Jacob Oram took 3-47.
Earlier, stand-in skipper Taylor came to the crease at the Wankhede Stadium in the 30th over with his side on 149-2 after a steady start and injected urgency into the innings.
In one devastating over Taylor, who smashed 131 in 124 balls against Pakistan, took 28 off Harvir Baidwan, smashing four sixes and a four.
He was caught by Hansra off the bowling of Balaji Rao for 74 off just 44 balls, including five sixes and six fours.
Brendon McCullum was the mainstay of the innings, scoring 101 in 109 balls as New Zealand had few problems with the toothless Canada attack.
Kane Williamson (34 not out) and Scott Styris (35) also joined in the onslaught, as the Canadian bowlers wilted, before a stunning cameo of 31 from James Franklin off just eight balls including three sixes and two fours. New Zealand lashed 31 off the final over.
The pick of the bowlers for Canada was Davison, whose 10 overs of spin yielded 1-30 but they were ragged in the field, dropping catches amid the New Zealand onslaught. Baidwan went for a whopping 84 runs in his 9.1 overs and Rizwan Cheema was thrashed for 64 off just 4.5 overs.
The victory for New Zealand, without injured skipper Daniel Vettori, takes them to top spot in Group A with eight points, one clear of Sri Lanka, the only other team who have qualified for the quarter-finals. Canada have two points after one win and four defeats.
M Guptill c Bagai b Baidwan 17
B McCullum c Gunasekera b Baidwan 101
J Ryder c Osinde b Davison 38
R Taylor c Hansra b Rao 74
N McCullum c & b Rao 10
K Williamson not out 34
S Styris c Davison b Baidwan 35
J Franklin not out 31
Extras: (b2, lb3, nb2, w11) 18
Total: (for 6 wkts; 50 overs) 358
Did not bat: J Oram, K Mills, T Southee
Fall of wickets: 1-53 (Guptill), 2-149 (Ryder), 3-185 (B McCullum), 4-254 (Taylor), 5-259 (N McCullum), 6-318 (Styris)
Bowling: Chohan 7-0-40-0 (3w), Osinde 7-0-52-0 (2w), Baidwan 91-0-84-3 (1w), Rizwan Cheema 45-0-64-0 (2nb), Rao 10-0-62-2 (1w), Davison 10-1-30-1, Hansra 2-0-21-0
R Gunasekera c Taylor b Mills 2
H Patel c B McCullum b Oram 31
Z Surkari c Taylor b Mills 1
A Bagai c B McCullum b N McCullum 84
J Hansra not out 70
R Cheema c B McCullum b Oram 2
J Davison run out 15
B Rao c N McCullum b Oram 9
H Baidwan c Franklin b Southee 8
K Chohan c Taylor b Ryder 22
H Osinde not out 0
Extras: (b5, lb2, w9, nb1) 17
Total: (for 9 wickets; 50 overs) 261
Fall of wickets: 1-2 (Gunasekera), 2-4 (Surkari), 3-50 (Patel), 4-175 (Bagai), 5-179 (Cheema), 6-205 (Rao), 7-213 (Davison), 8-222 (Baidwan), 9-261 (Chohan)
Bowling: Mills 24-1-2-2, Southee 10-0-36-1 (1w), Ryder 12-0-15-1 (1w), Oram 10-1-47-3 (1w), Franklin 4-0-31-0 (1nb), N McCullum 8-0-56-1, Styris 10-0-41-0 (1w), Williamson 4-0-26-0 (1w)
Result: New Zealand won by 97 runs