Canada will contribute $5 million to the international mission led by the African Union in Central African Republic, Foreign Minister John Baird announced on Sunday.
Days of unrest have claimed some 600 lives as Christians and Muslims battled each other on the streets. More than a quarter of the population in the capital Bangui has fled their homes in fear.
Baird described the situation in Central African Republic as "dire" and said there are "urgent humanitarian needs."
"The civilian population is suffering, and I am particularly troubled by reports of people being targeted because of their religion," Baird said in a release.
Canada contributed over $6.9 million in humanitarian assistance to Central African Republic in 2013, according to the release. The latest round of contribution will be put into a UN-administered trust fund, which will be set up and operational in the coming days.
UN Security Council adopted a resolution last week that allows for a more muscular international effort to quell months or unrest in Central African Republic. France also launched a new military intervention in its former colony that includes disarming thousands of rebels accused of attacking civilians.
The government of Central African Republic, a predominantly Christian country, was overthrown in March by Muslim rebels from the country's north. While the rebels claimed no religious motive for seizing power, months of resentment and hostility erupted last week in a wave of violence that left more than 600 dead.
2 French soldiers killed
France now has some 1,600 troops on the ground in Central African Republic, but faced a setback when gunmen fatally shot two French soldiers in the capital on Tuesday.
The French casualties underscore the volatility of the mission to disarm combatants and bring stability to a largely anarchic capital.
President Michel Djotodia condemned the attack on the French forces and blamed former leader Francois Bozize, whom he ousted from power in March, for creating the turmoil now being unleashed on the streets of Bangui.
"The current situation is the logical result of what former President Bozize set in motion by freeing prisoners and bandits, distributing weapons of war and machetes in the neighbourhoods of Bangui, and inciting tribalism and religious hatred," Djotodia said Tuesday.
Bozize was overthrown after a decade in power and his current whereabouts are unknown. The former president maintains it was the arrival of thousands of rebels who descended upon the capital with arms who created the chaos.