In his first event since producing his best Grand Slam showing, Raonic took the top prize of $316,400 (235,635 euros) from the $1.9 million (1.4m euros) hardcourt event, a warm-up for the US Open starting later this month.
"I couldn't have asked for a better way to lead into my most important part of the year," Raonic said. "I'm fortunate to have played so well at the starting stages. It's tough after a few weeks away."
Raonic, who said he was "far ahead" of where he hoped to be in US Open preparations, had not won an ATP crown since last September at Bangkok and had not reached a final since losing to Juan Martin del Potro last October in Tokyo.
Pospisil, coming off a Wimbledon men's doubles title alongside American Jack Sock, played in his first ATP final after upsetting Czech top seed Tomas Berdych in the third round and playing four sets Saturday after completing a rain-halted quarter-final and beating Richard Gasquet in the semi-finals.
"He came out strong. He caught me off guard. He played so strong," Pospisil said. "I wasn't 100 percent but it wouldn't have made much difference."
In the WTA final, 29-year-old Russian Svetlana Kuznetsova, a two-time Grand Slam champion, won her first WTA title since 2010 at San Diego by defeating Japan's Kurumi Nara 6-3, 4-6, 6-4.
Kuznetsova, the 2004 US Open and 2009 French Open winner, had not reached a final since 2011 until earlier this year in Oerias while Nara, 22, won her first WTA title earlier this year at Rio de Janeiro and is set to surpass her career high of 38th in the rankings.
Raonic felt the pressure of the historic moment for Canadian tennis.
"I felt a little more pressure not to lose because of the situation and I'm happy with how I handled it," Raonic said. "All in all a good performance in a very important moment for me."
In only the second ATP final between players born in the 1990s, 23-year-old Raonic ripped through the first set against 24-year-old Pospisil in just 29 minutes, breaking three times and dropping only four points on his serve.
"I would never imagine starting off that well and I was fortunate enough to do so," Raonic said.
Raonic took the lone break of the second set in the final game, swatting a crosscourt backhand winner past his countryman to end matters after 67 minutes.
"I didn't think I played bad. Milos played well," Pospisil said. "I didn't get much sleep last night either."
Raonic, who won his only prior match with Pospisil in last year's Montreal semi-finals, will match his career high of sixth in next week's world rankings.
Pospisil could have jumped past his career-high ranking of 25th with a win, but will still rise from 36th into the top 30 as both head for home soil in the ATP Toronto event.
"We're both very excited to go there and play in front of the home crowd," Pospisil said.
Asked about their time as pre-teen rivals, Raonic said, "Vasek won every time" and Pospisil knew his winning score of their first meeting, 7-6, 6-4.
"I always knew Milos would get there when I was 15, the way he was serving and the potential he had," Pospisil said. "He had his breakthrough and I was able to get mine too."