The remarks have enraged U.S. President Donald Trump.
The calamitous summit ended in disarray after Trump broadsided his allies by disavowing a joint statement the U.S. had agreed to.
Canadian Prime Minister Justin Trudeau has vowed retaliatory action next month over USA tariffs on steel and aluminium.
Trump to miss environmental talks at G7
Nearly as an afterthought, Trump - now in Singapore for a summit with North Korean leader Kum Jong Un - tweeted: "Great to be in Singapore, excitement in the air!" "$800 billion trade deficit", he said via Twitter.
Other members of the Group of 7 stood with Canada against Trump.
"We are convinced that a modernisation is perfectly possible, we are convinced that common sense will triumph", she said.
"We strive to reduce tariff barriers, non-tariff barriers and subsidies", it said.More news: Wynne Stepping Down As Ontario Liberal Leader After Election Disaster
In recent weeks, trading partners of the U.S. have criticised new tariffs on steel and aluminium imports imposed by the Trump administration.
President Trump left the meeting half-way, warning the G7 nations that if they don't remove trade barriers with the USA, they will face consequences. Big trade barriers against USA farmers, and other businesses, will finally be broken. He did him a favor, and he was even willing to sign that socialist communique.
Canadian officials, including Trudeau, have fanned out across the United States as part of a months-long charm offensive to appeal to pro-trade Republicans at every level.
Germany and France both issued robust responses to Mr Trump's decision to order USA officials not to endorse the communique. "We have seen this with the climate agreement or the Iran deal".
In Quebec City early on Sunday, Trudeau declined to answer reporters' questions about the aftermath of the two-day G7 summit in Quebec.More news: Regina man remembers father after Spade and Bourdain deaths
While foreign policy issues like North Korea don't usually have much bearing on the polls, Trump's extraordinary outburst on Monday against NATO allies, the European Union and Canada appeared aimed at striking chord with voters who support his "America First" agenda. "That Canada could be considered a national security threat to the United States is inconceivable". "And then hope that the European Union will respond again in the same unity", she said.
The EU then announced retaliatory tariffs on United States goods ranging from Harley-Davidson motorcycles to bourbon.
Asked why she allowed Trump to run rings around her, Merkel pointed to the EU's retaliatory tariffs and said, "We don't let ourselves be taken advantage of again and again".
James Brander, an global trade expert at the University of British Columbia in Vancouver, said Freeland's comments were meaningful.
"I don't want us to keep inflating our language", she added, saying the word "depressed" was "already a lot, coming from me", in an ironic reference to her usual unflappable appearance.More news: Trump doubles down on criticism of EU, Canada