Earlier this year, the award-winning singer announced he would seeking the Tory nomination in the new federal riding of Bow River in southern Alberta.
But on Friday, Canyon posted a message to fans on his website saying a recent health scare has made him re-evaluate that.
Canyon said "everything is fine" but did not specify the health problem.
He has spoken publicly about being diagnosed with Type I diabetes as a child.
Canyon said he wants to dedicate his time to his family and his fans.
"I have realized that I'd rather serve my fans and fellow Canadians through my music," said the statement. "A health scare has the serendipitous ability to remind all of us that life is precious and finite."
When he first announced his intention to seek the candidacy, he made the announcement on a radio station in High River, the southern Alberta community devastated last summer by torrential rain and floods. Canyon helped out during the relief campaign following the disaster.
"My wife and I were working alongside all of these volunteers, people being completely giving of themselves ... and I said to my wife, 'You know, I really feel that I need to serve more,' Canyon said at the time.
Canyon, who lives on a ranch outside the town, said there was no one single political issue that was driving him; he said he simply wanted to ensure that the largely rural area that includes cattle ranches, grain farms, and oil and gas rigs continues to grow and prosper.
The sprawling riding includes the communities of Brooks and Taber but does not include the town of High River.
The area encompasses parts of the existing ridings of Macleod, which was represented by Conservative Ted Menzies before he retired a few months ago, and Crowfoot, which is represented by Kevin Sorenson, minister of state for finance.
In the last two elections, Menzies won more than 77 per cent of the vote, Sorenson more than 83 per cent.