Vettel admitted after qualifying he was "a passenger" during practice but says it felt "more natural" while driving his Ferrari in qualifying.
It is the Italian team's first time on pole in Montreal since seven-time champion Michael Schumacher managed it in 2001.
"When I heard whispers about a potential penalty here, I was like, 'I'll take it in Paul Ricard, but not here, '" Ricciardo said.
Vettel put Friday's troubles behind him and narrowly edged Valtteri Bottas by 0.093s to secure top spot on the grid.
With Lewis Hamilton in doubt over his long-term future within the sport, Toto Wolff told Dutch newspaper De Volkskrant that he is a fan of Max's style of driving and could become a Mercedes driver when his Red Bull contract expires. "It was a bit surprising, there was no way for me to carry on". After leading all three practice sessions, Red Bull driver Max Verstappen will start third, alongside Hamilton.
Vettel, meanwhile, was forced to miss the start of FP2 after lengthy set-up changes were made to his auto, and he conceded that Ferrari have work to do ahead of qualifying.
"We extracted the best we could out of qualifying".
"I think they'll be at this stage hard to beat, but I think we can still improve the auto a lot, do more laps, learn a bit more and I think we'll be okay".
Before qualifying began, Pierre Gasly was forced to resort to the old-spec Honda power unit prior to the start of the qualifying session.
Hamilton was struggling throughout qualifying, despite looking strong through most of the weekend, but he surely will not have expected to end up down in fourth on a circuit where he has taken six wins and six poles in 10 events, nor to be beaten by a team-mate for only the second time in his career here.
Verstappen added: "I'm very happy with this weekend". Hamilton's chief championship rival, Sebastian Vettel, finished fifth.
When asked if he felt Red Bull had the pace for pole after seeing teammate Daniel Ricciardo go quickest in Q2, he said: "I knew we had a good vehicle, but I wanted to wait and see how competitive we would be in Q3". "I was a lot happier with the auto and I think we can carry that into the race".
The young Dutchman Verstappen clocked 1:12.198 seconds. It will be interesting to see how it does in the start of the race, especially because Red Bull will start on the hypersoft.
Mercedes were first out in Q3 and smashed the records, Bottas topping Hamilton in 1:10.857 before Vettel beat that.