The question says it all pretty much. I've been searching around and starting to worry that it's impossible.
I've got this canvas element that I'm drawing text to. I want to set the letter spacing similar to the CSS
ctx.font = "3em sheepsans";
ctx.textBaseline = "middle";
ctx.textAlign = "center";
ctx.fillStyle = "rgb(255, 255, 255)";
ctx.fillText("Blah blah text", 1024 / 2, 768 / 2);
ctx.letterSpacing = "2px";
This is not possible; the HTML5 Canvas does not have all the text-transformation power of CSS in HTML. I would suggest that you should combine the appropriate technologies for each usage. Use HTML layered with Canvas and perhaps even SVG, each doing what it does best.
Note also that 'rolling your own'—drawing each character with a custom offset—is going to produce bad results for most fonts, given that there are letter kerning pairs and pixel-aligned font hinting.