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Nadal will face off Friday for a semi-final place against Argentine Juan Del Potro after the sixth seed rallied past Romanian Victor Hanescu 3-6, 6-3, 6-4.
Number three Andy Murray continued to push towards replacing Nadal at second in the world as the Scot manhandled Spanish veteran Juan Carlos Ferrero 6-1, 6-3.
Murray completed a summer victory hat-trick 6-1, 6-3 over the 29-year-old after winning their June matches at Queen's and Wimbledon.
Murray must reach the semifinals and hope for Nadal to lose in the quarterfinals to become the new number two.
The 2007 champion Novak Djokovic, the number four, beat Russian Mikhail Youzhny 6-3, 6-4.
Two-time Canadian champion Andy Roddick hung tough in a final-set tiebreaker to outlast Fernando Verdasco 7-6 (7-2), 4-6, 7-6 (7-5).
The American fifth seed has now played the quarters or better at his last five events dating to Queen's club on grass in early June. Roddick was out-aced by Spain's Verdasco 13 to 12 in a struggle lasting more than two and a half hours.
Montreal marks the first time the top eight players in the world have reached the quarter-finals of the same tournament.