The COVID-19 pandemic has exacerbated health inequalities, with a potentially heightened mental health risk for Mainland Chinese in Canada, given the rising anti-Chinese discrimination, and barriers in assessing health services. In this context, this study aimed to assess non-pathological psychological distress towards COVID-19 and identify its sociodemographic risk factors among Mainland Chinese in Canada at the early stages of the pandemic. Methods: A sample of 731 Mainland Chinese aged 16 or older completed an on-line survey to examine their attitudes, behavioural, and psychological responses towards COVID-19. Non-pathological psychological distress was assessed with a 7-item self-report scale to capture common emotional reactions towards COVID-19. Results: A factor analysis revealed a single-factor structure of the 7-item COVID-19 psychological distress scale (Eigen λ = 3.79). A composite psychological distress index (PDI) score was calculated from these items and used as the outcome variable. Multivariate regression models identified age, financial satisfaction, health status, and perceived/experienced discrimination as significant predictors of psychological distress (ps ≤ 0.05). Conclusions: Mainland Chinese in Canada who were over 25, in poor financial/health status, or with perceived/experienced discrimination were at a higher risk for COVID-19-related psychological distress. The health inequity across these factors would inform the services to mitigate mental health risk in minority groups.