Recommendations suggest limiting the intake of free sugar to under 10% or 5% of calories in order to reduce the risk of negative health outcomes. This study aimed to examine Canadian free sugar intake and model how intakes change following the implementation of a systematic reformulation of foods and beverages to be 20% lower in free sugar. Additionally, this study aimed to examine how calorie intake might be impacted by this reformulation scenario. Canadians’ free sugar and calorie intakes were determined using free sugar and calorie data from the Food Label Information Program (FLIP) 2017, a Canadian branded food composition database, and applied to foods reported as being consumed in Canadian Community Health Survey—Nutrition (CCHS-Nutrition) 2015. A “counterfactual” scenario was modelled to examine changes in intake following the reformulation of foods to be 20% lower in free sugar. The overall mean free sugar intake was 12.1% of calories and was reduced to align with the intake recommendations at 10% of calories in the “counterfactual” scenario (p< 0.05). Calorie intake was reduced by 3.2% (60 calories) in the “counterfactual” scenario (p< 0.05). Although the overall average intake was aligned with the recommendations, many age/sex groups exceeded the recommended intake, even in the “counterfactual” scenario. The results demonstrate a need to reduce the intake of free sugar in Canada to align with dietary recommendations, potentially through reformulation. The results can be used to inform future program and policy decisions related to achieving the recommended intake levels of free sugar in Canada.