The Haas driver was found to have gone faster than the minimum delta time set by the FIA ECU on his return to the pits when the session was red flagged in Q3, as Oscar Piastri put his McLaren in the wall at Turn 7 amid wet conditions in Montreal.
Hulkenberg had set a lap good enough for second on the grid moments before the red flag emerged, and the worsening rainfall ensured that nobody was able to improve when the session restarted.
The session was stopped as Hulkenberg hit the opening pair of corners, and as a result he was 1.5 seconds over the delta time which he was unable to rectify.
The penalty thus moves him back to fifth on the grid, as Fernando Alonso will now join Max Verstappen on the front row. Lewis Hamilton moves up to third and George Russell will start from fourth with Hulkenberg shuffled behind both Mercedes drivers.
In the official documentation supplied by the stewards, the FIA noted: "The driver had just finished his fastest lap and had started another push lap. He was at T1 when the red flag was displayed, however at that point he was already 1.5 seconds over his delta time.
"He claimed this made it extremely difficult for him to come below the delta in the next sector. He also admitted to confusion about the beep signal in his headset, and therefore at one stage thought he was going too slow.
"Comparison of telemetry with that of Car 31 showed that in general for the rest of the lap he was approximately the same speed as Car 31 which complied with the delta times in each mini-sector. We regard this as a mitigating circumstance.
Source: Autosport