Previously, sailors were permitted to drink while off duty; now they will only be allowed to on special occasions at the captain's discretion.
The new measures come after a warship had to be recalled after incidents involving allegedly inebriated crew.
The new restrictions bring the Canadian navy closer in line with the navies of the US, Britain and New Zealand.
Beer vending machines will be removed from warships, and the price of alcohol will be raised in the onboard bars.
Royal Canadian Navy Commander vice-admiral Mark Norman told journalists that several "questionable incidents" concerning drunken sailors had prompted the decision.
"This is about a growing concern over a period of a couple of years where we had growing indicators of misconduct across the navy," he said.
In July, Commander Norman ordered warship HMCS Whitehorse back to Canada from an exercise in the US.
Three sailors were accused of sexual misconduct, shoplifting and drunkenness while the ship was in port.
