Rossi crashed in the final minutes of practice, causing the steering wheel to snap around.
The #7 pilot glanced the tyre barrier at turn eight before hitting the concrete, which caused significant damage to the left front corner of.
Rossi was slow to extract himself from his car and could be seen grasping his thumb.
The 32-year-old was taken to the infield medical centre and released before McLaren confirmed his withdrawal.
“Following an incident that resulted in contact with the turn eight wall during Practice 1 of the Ontario Honda Dealers Indy Grand Prix, Alexander Rossi was seen and released by IndyCar medical,” a statement read.
“The incident resulted in a broken right thumb. Alexander will be unable to compete this weekend. Arrow McLaren will announce who will pilot the No.7 Ryde Arrow McLaren Chevrolet the remainder of this weekend once confirmed.”
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On commentary, James Hinchcliffe noted Rossi was a car width wide of the apex and just enough off the ideal racing line that he understeered.
“Just caught the tyres before he got to the wall,” said Hinchcliffe.
.@AlexanderRossi was seen and released following this contact with tire wall in practice. pic.twitter.com/5gZ4k9PMeQ
— NTT INDYCAR SERIES (@IndyCar) July 19, 2024
“That was strange. He was in a little hot but it’s like once he got off-line there was just no grip at all. The car didn’t turn.
“We’ve seen a bunch of guys lock up into [turn] eight and be okay. You can see how dirty and dusty it is off-line there. Such a small error with such big consequences.
“That’s the thing, he wasn’t able to get his hands off the wheel,” he added.
“He was just trying to hang onto it. Wasn’t sure if he was going to clip the tyre barrier or not.”
Rossi will have the next three weekends off to recover as IndyCar goes quiet to account for the Olympics Games in Paris.
After Toronto, the next race isn’t until August 18 at Gateway.
“First of all, I’m very thankful for all the men and women on the IndyCar medical team and for all the great work they do,” Rossi said in a statement.
“It’s unfortunate because the injury occurred when I almost made it around the corner, and I didn’t want to give up on it, so I didn’t quite get my hands off the wheel in time.
“However, everyone seems optimistic about the kind of injury it is. We’re going to take the next steps here and get ready for Gateway.”
Oliver Askew has been tipped to replace Rossi in Toronto. The 27-year-old last raced for McLaren in 2020 at St Petersburg.
His last start came in 2021 with Rahal Letterman Lanigan Racing on the streets of Long Beach.
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