Playing on home soil, at La Caja Magica stadium in Madrid, Nadal maintained an upper hand throughout, with the final scoresheet reading 6-3, 7-6, (9-7).
Earlier on Sunday, Roberto Bautista Agut defeated 19-year-old Canadian Felix Augier-Aliassime with a score of 7-6, (7-3), 6-3 in a hard-fought match.
Spain had beaten Britain in the semi-finals while Canada had to overcome Russia to play in the finals of the revamped Davis Cup tournament.
The Spanish national team previously won the Davis Cup in 2000, 2004, 2008, 2009, and 2011. After the format of the competition was changed for the 2019 edition, the finals featured 18 teams, which competed in six groups of three. Group winners and the two best runners-up advanced to the play-offs.