A bridge loan is the usual fix when the numbers do not line up, and Canadian lenders typically price it against the equity in your sold home once a firm agreement is in place. CMHC's mortgage rules still apply to whatever financing remains on the smaller home, so a lender needs your sale numbers finalized before approving the new purchase.
Timing the two possession dates to overlap by even 7 to 10 days removes most of the stress, but it requires both agreements to be flexible on dates, which a seller's market rarely offers and a slower one does. Where you have genuine equity and no urgency, listing first with a longer possession date is usually the least expensive route.
This is exactly the situation a hand-reviewed valuation is built for, since knowing your realistic number before you shop for the smaller home tells you what bridge financing, if any, you actually need. Joel Dyck's hand-reviewed valuation gives downsizing sellers that number before they make an offer on anything.