The Security Council has 10 non-permanent members, elected for two years each, in addition to permanent members the UK, China, France, Russia and the United States. All permanent members have the power to veto resolutions.
The council can authorise peacekeeping operations, impose international sanctions, and determine how the UN should respond to conflicts around the world.
What happened in the vote?
Norway secured 130 votes, while Ireland got 128 and Canada managed just 108.
India ran unopposed to win in the Asia-Pacific region, while Mexico also ran unopposed.
The terms for new members start on 1 January 2021.
Jessica Murphy, BBC News, Toronto
This is the second time in a row Canada has lost its bid for a UN Security Council seat.
When the former Conservative government lost the race in 2010, the then-opposition Liberals were among the critics calling it an embarrassing failure on the world stage.
They said it was the result of a disregard for multilateralism and engagement.
When the Liberals won, Prime Minister Justin Trudeau vowed "Canada is back" and a willing partner in the international community.
Now, he will have to explain how it happened again under his watch.
In the final weeks, Mr Trudeau called some 50 world leaders to lock in their votes.
On Wednesday, Foreign Minister Francois Philippe Champagne tried to put a positive spin on the loss.
The result was not the one Canada had hoped for, he conceded, but what mattered were the bilateral relationships strengthened along the way.
Mr Champagne told reporters there will be time to analyse what went wrong at a later date.