Canada has substantial potential for geothermal energy development. To date, development has all been for heating applications. Canada has 103,523 direct use installations as of 2013. There is currently no electricity being generated from geothermal sources in Canada although substantial potential exists in the Canadian Cordillera. The most advanced project exists as a test geothermal-electrical site at the Mount Meager massif in British Columbia, where a 100 MegaWatt (MW) facility could be developed. Potential for enhanced geothermal energy systems (EGS) exists throughout Canada. There are six geothermal power and two direct use projects listed with the Canadian Geothermal Energy Association.

The United States currently leads global development of geothermal power with 3,477 MWe of installed electrical power capacity, including 312 MWe added between 2010 and 2015. Whereas, Canada has 0 MW online, however, the geology conducive to geothermal development does not arbitrarily end at the Canada–United States border. Several states that share a border with Canada have significant geothermal capacity in development. It is estimated that Alaska has 95 MW in development, Idaho has 438–514 MW, Washington has 100 MW and even North Dakota has two small developments underway.

At present, Canada remains the only major country in the Pacific Rim that is not producing electricity from its geothermal resources. This is even though the colder it is outside, the more electricity a geothermal power plant can produce. This is because the larger the temperature differentials between the geothermal resource and the ambient air temperature, the more efficiently geothermal plants operate. This makes geothermal power ideal for cold northern countries.

In 2012, the Geological Survey of Canada issued a report entitled, the "Geothermal Energy Resource Potential of Canada (Open File 6914) ("The GSC Report"). The GSC Report concluded that "Canada’s in-place geothermal power exceeds one million times Canada’s current electrical consumption." Even if just a fraction of this energy can be used, it has the potential to significantly impact the Canadian electricity grid.

The GSC Report also notes that the now defunct National Geothermal Program (a Canadian government research program that ended in 1986) demonstrated that Canada has a geological environment favourable to geothermal development. This program defined high-temperature resources suitable for geothermal exploration and development, particularly in British Columbia, Yukon, and the Northwest Territories. Medium and low-temperature geothermal resources were also defined within sedimentary basins and abandoned mines throughout Canada. Pilot projects drilled at Meager Creek, British Columbia, and Regina, Saskatchewan further proved that geothermal power production in Canada is feasible. Now, 25 years since the program ended, advancements in technologies have further increased the economic potential of these geothermal resources.

For utility-scale electrical generation using traditional dry steam and flash steam power stations, high temperature resources at reasonable drill depths are required. The study therefore defines regions at 150 °C (302 °F) that are at a depth of 5 kilometres (3.1 mi) or shallower as having high potential for high temperature geothermal systems such as electricity generation. Regions that meet such criteria include British Columbia, extreme northern Alberta, southeastern Yukon, and Northwest Territories.

For utility-scale electrical generation using binary cycle power stations, regions with hot springs and warm sedimentary basins with temperatures between 80 and 150 °C (176 and 302 °F) at reasonable drill depths are required. These regions include British Columbia, western and southern Alberta, southern Saskatchewan, Yukon, and Northwest Territories.

For geothermal heat pumps, regions with moderate and cool temperature sedimentary basins and/or fractured rock that can easily produce waters or be easy to drill shallow well systems for the installation of circulation loops, are required. These regions include British Columbia, Alberta, southern Saskatchewan, southern Manitoba, northern and southern Ontario, southern Quebec, New Brunswick, northern Nova Scotia, Prince Edward Island, Yukon, Northwest Territories, and Nunavut.