While McLaren's championship leader Kimi Raikkonen suffered a nightmare afternoon, failing to clock a time after skidding off, resurgent Williams set the pace.
Ralf lapped the Gilles Villeneuve circuit, named after Canada's late Ferrari great, in one minute 15.529 seconds as the morning rain lifted.
His Colombian team mate Juan Pablo Montoya, winner of the season's glamour race in Monaco two weeks ago, slotted in alongside him with a time 0.394 slower.
It was the first all-Williams front row of the year.
Ralf's older brother Michael, Ferrari's five times world champion, was third fastest and shares the second row with Renault's Spaniard Fernando Alonso.
Ferrari's Brazilian Rubens Barrichello was fifth quickest with Australian Mark Webber sixth for Jaguar.
Raikkonen skidded off at the end of the start-finish straight on his flying lap, clouting the tyre barriers backwards. He then struggled to get the car off the waterlogged grass runoff, the rear wheels spinning wildly.
The Finn leads Michael Schumacher by four points in the standings after seven races, but the German is the master of Montreal, with five wins in nine years.
Sunday will be the third time this season that the 23-year-old Finn has started at the back of the grid or from the pit lane after qualifying problems.
Canadian Jacques Villeneuve, son of Gilles, was first out on the track after spinning full circle within sight of the finish in Friday's first one-lap session.
The 1997 champion ended up 14th on the grid, leaving the BAR driver a tough task to score points in Montreal for the first time since his debut season in 1996.
Briton Ralph Firman, fourth quickest in Friday's qualifying, had a nightmare session as his hopes evaporated with a place on the back row.
