As an Indian citizen on a valid H1-B in the USA, can I apply for my Schengen visa in Canada?

As noted in Crazydre's comment, you can apply in Vancouver, but the consulate there will almost certainly decide that it is not competent to decide the application. In that event they will "reject" the application, which means they will return it, refund your fee, and direct you to apply to the appropriate post.

This is governed by the Schengen Visa Code, Article 6:

1.  An application shall be examined and decided on by the consulate of the competent Member State in whose jurisdiction the applicant legally resides.

2.  A consulate of the competent Member State shall examine and decide on an application lodged by a third-country national legally present but not residing in its jurisdiction, if the applicant has provided justification for lodging the application at that consulate.

In practice, the threshold for accepting such "justification" appears to be very high. For examples, we can turn to the Handbook for the processing of visa applications and the modification of issued visas. Section 2.8, Can a consulate accept an application from an applicant not residing in the jurisdiction of the consulate, includes the following:

As a general rule, only applications from persons who reside legally in the jurisdiction of the competent consulate (as described in points 2.1-2.5) should be accepted.

However, an application may be accepted from a person legally present – but not residing - in the jurisdiction of the consulate where the application is submitted, if he can justify why the application could not be lodged at a consulate in his place of residence. It is for the consulate to appreciate whether the justification presented by the applicant is acceptable.

It goes on to present four examples, in three of which the conclusion is that the consulate should handle the application. The reasons in those three cases are:

• A performing artist from Peru cannot apply at home because she will be on tour in North America during the three-month period for applying for a visa.
• An academic from China is teaching summer school in the UK when she unexpectedly requires a visa to visit her sick father in France
• A group application includes some applicants who live outside the consulate's jurisdiction, but a majority of the applicants reside within it.

In the remaining example, in which the application should be rejected, a Moroccan wishes to apply for a visa while on vacation in Canada because the waiting times at the consulate in Rabat are too long.

Your reason is obviously intermediate: it's not as compelling as the first examples, but it's more compelling that simply wanting to avoid a long waiting time.

Still, you haven't said why you want to avoid flying to San Francisco. Simply saying that you prefer driving to Vancouver over flying to San Francisco is unlikely to succeed. You stand a better chance if there is a compelling reason why flying to San Francisco would be an undue burden. But be careful: if you complain about the cost, you might increase the chance of a visa refusal, because if you cannot afford to fly to San Francisco then you may not be able to afford your trip to Europe.

Having said that, there's not much to lose by trying a Vancouver application, as long as you don't plead financial hardship, and as long as you are prepared for the likely outcome. If they reject the application, they will return your fee, so you will not have lost much other than time. You can then apply in San Francisco.

Finally, you should also be aware that you are supposed to determine which country's consulate should handle your application based on your main destination. The fact that you are flying to Amsterdam does not imply that the Netherlands is your main destination. For example, if the principle purpose of your trip is to attend some event in another Schengen country, or if you will be spending more time in another Schengen country, you should be directed to apply to the consular representation of that country instead of the Netherlands.