Former champion cyclist Louis Garneau posed with the Queen as his wife prepared to take the picture - and then put his arm around the surprised monarch.
Buckingham Palace officials, touring Canada with the Queen and the Duke of Edinburgh, looked surprised.
"How things have changed," said one veteran courtier.
The Queen appeared not to mind, however, and beamed broadly for the camera.
A Palace official with the Queen said: "It's not the first time that someone has put an arm around the Queen and again the Queen just takes it as it comes."
An incident in Australia 10 years ago, when then Prime Minister Paul Keating touched the Queen's lower back, brought protests and earned Mr Keating the nickname "Lizard of Oz".
Mr Garneau, 44, from French-speaking Quebec, told reporters: "I asked for a picture and she said 'No problem'.
"So I just put my arm around her shoulder. In sport, we do that all the time."
'I remember you'
During his cycling career, Mr Garneau won more than 150 races and competed in the Olympics. He now runs his own sports equipment and clothing company.
He was one of 50 VIP Canadians invited to a Golden Jubilee lunch at her official Canadian residence, Rideau Hall, in Ottawa.
Later, the Queen staged a walkabout in the hall's grounds when Mr Garneau seized his royal photo opportunity.
"The Queen said, 'I remember you - you were a cyclist - I hope business is good now'," Mr Garneau said.
"The last time I met the Queen was in 1982 at the Commonwealth Games in Brisbane.
"It was good to see her again - I hope I haven't done anything wrong."
According to protocol, the Queen should not be touched in any way beyond a polite handshake.
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