In a saucepan over medium-high heat, sauté pearl onions in canola oil until well browned. Add sugar and stir with a wooden spoon to mix together. Immediately add vinegar and red wine. Stir again.
Reduce mixture by 2/3, about 15 minutes at a medium boil. Add demi-glace and reduce to a syrupy consistency (about 5 minutes). Just before serving, turn off heat and add butter, stirring quickly to incorporate. Serve over lamb.
To cook the lamb: season with salt and pepper all over and either sear in a frying pan or on a hot grill until well-browned on all sides. Place in oven and cook at 400°F (200°C) for about 20 to 25 minutes for medium-rare, 30 to 35 minutes for medium and 40 to 45 minutes for medium-well and well done.
Allow the lamb to rest on the stovetop 10 to 15 ?minutes before serving to allow the juices to settle evenly throughout the meat. Cut and serve.
Tip: Sauce can be partly made up to 4 days ahead; add demi-glace and butter before you're ready to use.