After an amateur playing career with the Fredericton-based UNB Varsity Reds of the Canadian Intercollegiate Athletic Union, Kelly joined the Ontario Hockey League's (OHL) London Knights as an assistant coach in 1988.
He returned to UNB in 1996 as head coach, where he led the team to a University Cup appearance in 1997 and won it in 1998.
He spent one season as head coach of the Brandon Wheat Kings in the Western Hockey League in 2003–04.
Kelly then served as an associate coach under Gerard Gallant with the Saint John Sea Dogs of the Quebec Major Junior Hockey League (QMJHL) from 2009 to 2012, in which the Sea Dogs became the first QMJHL team to have three 50-win regular seasons in a row and the first team to bring a Memorial Cup title to the Maritimes.
[2] After Gallant left, he became the head coach and general manager for the Sea Dogs for the 2012–13 QMJHL season.