Non-point source (NPS) pollution is an important problem that has been threatening freshwater resources throughout the world. Best Management Practices (BMPs) can reduce NPS pollution delivery to receiving waters. For economic reasons, BMPs should be placed at critical source areas (CSAs), which are the areas contributing most of the NPS pollution. The CSAs are the areas in a watershed where source coincides with transport factors, such as runoff, erosion, subsurface flow, and channel processes. Methods ranging from simple index-based to detailed hydrologic and water quality (HWQ) models are being used to identify CSAs. However, application of these methods for Canadian watersheds remains challenging due to the diversified hydrological conditions, which are not fully incorporated into most existing methods. The aim of this work is to review potential methods and challenges in identifying CSAs under Canadian conditions. As such, this study: (a) reviews different methods for identifying CSAs; (b) discusses challenges and the current state of CSA identification; and (c) highlights future research directions to address limitations of currently available methods. It appears that applications of both simple index-based methods and detailed HWQ models to determine CSAs are limited in Canadian conditions. As no single method/model is perfect, it is recommended to develop a ‘Toolbox’ that can host a variety of methods to identify CSAs so as to allow flexibility to the end users on the choice of the methods.