Canada and Japan: reinforcing the relationship

Canada and Japan are on a clear trajectory to strengthen a partnership that aligns their economic and strategic interests. At the Canada-Japan Business Networking Luncheon at Torys’ Toronto office last week, Torys and The Japan Society Canada explored the countries’ alignment of priorities and interests in a rapidly shifting geopolitical environment. The event featured a keynote address by Goldy Hyder, president and CEO of the Business Council of Canada, with Torys partners John Emanoilidis and Carly Klinkhoff as speakers.

What you need to know

• Canada and Japan are well into the process of building a stronger relationship, considering their complementary economies and shared focus on economic security, and mutual possibilities in energy and infrastructure, critical minerals, life sciences, agriculture, technology, and defence.
• Strategic partnerships and rising deal activity are deepening bilateral ties, with long-term value central to Japanese investment.
• Business opportunities extend to infrastructure, agribusiness, and advanced technology, as Canadian investors seek to expand their presence in Japan, and Japan continues to be one of the largest sources of foreign direct investment (FDI) for Canada.

Complementary economies, shared advantage

As the global economic landscape becomes less certain, the economic complementarity between Canada and Japan is an advantage. The countries share a foundation of business experiences as trading nations based on mutual trust with 98 years of diplomatic relations, and with economic security and supply chain stability as common priorities. Predictability, trust, and sustainable long-term growth are fundamental to both countries’ practices in business matters, from joint ventures to financings, technology transfer, and investments.

Japan is Canada’s largest source of FDI from the Indo-Pacific, and third-largest source of FDI overall at C$54.8 billion in 2025, most notably in the automotive sector. Japan is also Canada’s fifth-largest trade partner. And while Japanese inbound investment in Canada has exceeded Canadian outbound investment in Japan, several major Canadian investors have recently announced plans to increase outbound investment into Japan.

Against this backdrop, energy and infrastructure, critical minerals, life sciences, agriculture, technology, and defence are identified as key areas for Canada and Japan to grow and collaborate.

Noteworthy developments to date

The following initiatives were discussed at the luncheon:

• Building on their membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Prime Ministers Mark Carney and Sanae Takaichi announced their Comprehensive Strategic Partnership in March 2026. The partnership deepens their cooperation across defence, energy and infrastructure, trade, and technology. Under the partnership, a Canada-Japan equipment and technology transfer agreement came into force in June 2026, establishing a framework to facilitate the transfer of defence equipment and technology.
• Japan seeks energy supplies, including liquefied natural gas (LNG), liquefied petroleum gas (LPG), and oil, from reliable partners. Canada has articulated its goal to become a global energy superpower; it became an LNG exporter in June 2025, and the first shipment of Canadian LNG departed for Japan from British Columbia in early July 2026.
• In June 2026, Canada’s Minister of International Trade led a Team Canada Trade Mission to Tokyo—the largest mission to the Indo-Pacific region since the program launched in 2023. The goal of the mission was to showcase Canada’s strengths in defence and security, clean technology, digital innovation, agribusiness, and forestry. Canadian companies struck more than $1.7 billion in 14 commercial deals during the visit.  
• Canada-Japan cross-border M&A remains strong. Recent examples include Japan-based Kirin Holdings’ proposed C$2.5 billion acquisition of Jamieson Wellness, a publicly listed Canadian company¹, Umios Corporation’s agreement to acquire High Liner Foods for more than C$800 million², and continued investment in CCUS projects, natural resource (mining) and renewable energy projects, pharmaceuticals, manufacturing, and distribution.
• Canada and Japan have mutual interests in infrastructure, agriculture, and advanced technology.
• Building on the Comprehensive Strategic Partnership, several Canadian business delegations traveled to Japan in September and October 2026 to advance the bilateral economic partnership in the areas of advanced technology, clean energy, life sciences, and defence.

In summary

Canada and Japan are deepening their economic and strategic partnership, building on complementary economies, shared priorities around economic security and supply chain resilience, and growing opportunities in energy, critical minerals, defence, infrastructure, and advanced technology. They have been reinforcing their ties with investments, M&A deals, and other bilateral initiatives, while creating new opportunities for Canadian and Japanese businesses to expand their presence in each other’s markets.