Gas hydrate, a solid form of natural gas and water, is inferred to widely occur in Canadian polar and continental shelf regions and in sediment of outer continental margins. Although direct indications of hydrate are few and widely separated, conditions potentially favorable for gas hydrate formation and stability, especially low to moderate temperatures under permafrost or the deep sea, combined with favorable geological conditions for gas generation and storage, cover vast areas and indicate an immense potential for natural hydrocarbon gas in the upper 2 km of many Canadian sedimentary basins. We have analyzed the potential of gas hydrates for the vast continental shelves and Arctic permafrost regions of Canada (Mackenzie delta-Beaufort Sea and Arctic Archipelago in the north and Davis Strait, the Labrador Shelf, Scotian Shelf, and Grand Banks of Newfoundland along the Canadian Atlantic margin and Canadian Pacific margin). Our conservative calculation suggests 10(10)-10(12) m(3) of gas hydrates in these regions has an associated methane gas potential estimated to be in the range of 10(12)-10(14) m(3). The volume of methane in hydrates in Canada are geographically distributed in the following regions: 0.24-8.7 X 10(13) m(3) in the Mackenzie delta-Beaufort Sea, 0.19-6.2 x 10(14) m(3) in the Arctic Archipelago, 1.9-7.8 x 10(13) m(3) on the Atlantic margin, and 0.32-2.4 x 10(13) m(3) on the Pacific margin. The total in-situ amount of methane in hydrates of Canada is estimated to be 0.44-8.1 X 10(14) m(3), as compared to a conventional Canadian in-situ hydrocarbon gas potential of approximately 0.27 x 10(14) m(3). This comparison suggests that gas hydrates represent a possible future assurance of North American energy supply if the gas can be recovered and separated from the hydrate form.