Large crowds along the parade route greeted the youthful politician whose popularity is soaring, as he walked through the city's downtown alongside colorful floats, dancers and musicians.
Trudeau made history in July when he became Canada's first sitting prime minister to participate in Toronto's Gay Pride parade, and also attended Vancouver's pride event.
Canada is "an open, positive society," the prime minister said, speaking in French. "It's an example that we should provide to the whole world."
Government representatives from all of Canada's political parties joined Trudeau in Montreal.
"It's important that all parties are here to recognise that the rights of the LGBT community are Canadian and human rights," Trudeau said before the event, sporting a seafoam green button-up and white pants.
Two girls led the procession holding a banner bearing the names of the 49 victims killed in the June 12 nightclub attack in Orlando, Florida.
"The Orlando massacre was a dark moment, and it's important to denounce these acts daily," said Quebec Justice Minister Stephanie Vallee, who is heading an action plan against homophobia.
Trudeau noted that the government would focus on recognising transgender rights this year.
His government unveiled legislation in May that would add "gender identity" as a banned grounds for discrimination under the Canadian Human Rights Act, alongside race, religion, age, sex and sexual orientation.
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