Canada X Indo-Pacific 9th Ed. CDN Defence Industrial Strategy, PM Visits Australia, India and Japan, Singapore Offers Significant Opportunity for Dual-Use Firms
9 February - 2 March
(Delay in publishing this latest update due to travel to Australia last week, and prep for upcoming travel to India this coming week)
EXECUTIVE SUMMARY
US launches strikes in Iran. Will it result in overextension and create opportunities for Beijing in the Indo-Pacific? Canada launches its first Defence Industrial Strategy at CAE in Montreal with a “Build–Partner–Buy” framework targeting 70% domestic procurement and 50% export growth. Critics note the Indo-Pacific despite growth focus is underweighted relative to Europe. Ministers McGuinty and Anand hold defence bilaterals with Japan, Australia, Singapore, and New Zealand at Munich after PM Carney cancels his trip. The Canada South Korea 2+2 in Ottawa produces a classified information sharing agreement, Defence Cooperation Agreement negotiations, and new Space and Cyber dialogue channels as Seoul pitches for Canada’s submarine project. Japan continues loosening export restrictions under PM Takaichi while absorbing new Chinese sanctions on 40 defence firms. PM Carney visits India, Australia and Japan (Feb 27–Early March) as New Delhi clears ₹3.6 lakh crore (roughly equivalent to ~$55B CAD+) in capital acquisitions while staging MILAN and International Fleet Review 2026, . Australia advances AUKUS submarine industrialization with UK SSN HMS Anson arriving in Western Australia alongside energetic materials R&D and counter-drone partnerships. Indonesia confirms KRI Bima Suci will visit Saint John, Canada under Operasi Kartika Jala Krida 2026. Malaysia launches “Future Force” 2026–2030 transformation amid sustained South China Sea pressure.
SUMMARY OF WHAT TO WATCH
Immediate (Next 30 Days)
US strikes on Iran raise risk of strategic overextension: With the US expanding operations against Iran (CENTCOM reporting large-scale strikes and early US casualties), Washington’s bandwidth and force posture in the Middle East may tighten potentially creating diplomatic and security “white space” that Beijing can exploit. See deployment of USS Gerald Ford & USS Abraham Lincoln and analysis here.
PM Carney Indo-Pacific Travel (Feb 27–Early March): Visits to India, Australia, and Japan watch for defence-industrial deliverables, particularly under the Japan Equipment and Technology Transfer Agreement signed in January.
Canada–ROK 2+2 Follow-Through: Frameworks signed (classified information, DCA negotiations, Space Dialogue, Cyber Consultations in March). Watch whether Korea’s submarine bid and dual-use tech collaboration produce near-term industrial outputs.
Medium-Term (2026)
DIS Takes Shape: Defence Investment Agency legislation expected Spring 2026; domestic strategic partner framework due by summer. For foreign partnerships, watch whether Indo-Pacific firms are included (or considered for partnership) or if Europe dominates.
Korea Submarine Competition Intensifies: Hanwha’s expanding Canadian alliances (CAE, BlackBerry, Algoma Steel, L3Harris Canada, Hydrogen investments and more) and fastest-delivery claims create competitive pressure alongside Seoul’s parallel nuclear submarine push.
Strategic (2026+)
DIS Indo-Pacific Gap as Strategic Risk: The 50% export growth and 240% revenue targets cannot be met through Europe alone. Rapidly expanding Indo-Pacific procurement pipelines and export capabilities are essential (particularly South Korea which is on track to become the 4th largest defence exporter by 2030). APF Canada’s critique that the DIS “needs an Indo-Pacific gear”.
Japan as Emerging Defence-Industrial Partner: The Security Information Agreement (July 2025) and Equipment and Technology Transfer Agreement (January 2026) create a new legal framework. Combined with loosening export restrictions and mutual interest in space, cyber, and undersea capabilities, Tokyo is a consequential partner but concrete industrial tie-ups remain to be delivered.
Middle-Power Coalition Forming: Carney’s “rupture” framing, the DIS’s strategic autonomy emphasis, the EU SAFE agreement, deepening Korea partnership, and Japan frameworks are pieces of a broader architecture, will it coalesce into something coherent?
CANADA: Defence Industrial Strategy Unveiled, PM Operationalizing Variable Geometry, Operation Nanook
Defence Industrial Strategy Unveiled: The Build–Partner–Buy framework names 10 sovereign capability focus areas (including aerospace, training and simulation, drones, and ammunition) and commits to directing 70% of defence spending to Canadian suppliers by 2030 (up from ~40%), increasing defence exports by 50%, and creating 125,000 new jobs. (Very ambitious policy, well done). For Canadian exporters, GAC support commitments and explicit mention of Indo-Pacific partners create tailwinds. For Indo-Pacific suppliers, the strategy’s emphasis on diversifying away from U.S. dependence and openness to partnering with “certain nations in the Indo-Pacific” creates a window. Firms from Japan, South Korea, and Australia can enter as Partner-tier collaborators, particularly where capability gaps exist in areas such as drones.
Prime Minister Carney Continues Trade Blitz: The PM announced travel to India, Australia, and Japan in late February and early March to shore up trade relationships as Canada continues its diversification push.
Source: BBC Defence Focus and Momentum Continues Across Government: Operation Nanook commences with commitments to enhance Arctic focus; IDEaS CUAS Sandbox Awards announced; engagement with Indo-Pacific partners at the Munich Security Conference, including bilaterals with Japan, Singapore, New Zealand, and Australia.
Watch: How will Canada balance the Build–Partner–Buy framework? What areas will the government prioritize for partnering? What concrete outputs will emerge from engagements in India, Japan, and Australia?
JAPAN Continued Loosening of Export Restrictions Amid Chinese Sanctions, Strong Exercise Cadence
Export Restrictions Lifting Amid Chinese Sanctions: Recent proposals at the highest levels of the Takaichi government would allow exportation of significant weapon systems, notable given Japan’s constitutional constraints on military exports. This comes as China announced additional restrictions on 40 Japanese defence firms.
Strengthening Intelligence Frameworks: Japan announced plans to enhance its foreign intelligence collection capabilities while bolstering counter-espionage measures domestically. Notable given conclusion of the Canada–Japan Security Information Agreement in July 2025.
High Exercise Cadence: Japan participated in Iron Fist 26; Japan–US IAMD drills; B-52 fighter sorties; JMSDF-US IW/EMW drill; Japan-US-Philippines maritime drill; Japan-India-Indonesia exercise; IFR 2026; Japan-Australia RAS; Japan-Philippines COMMEX/PHOTOEX.
Watch: What further adjustments will Japan make to its defence export regime? How will Chinese sanctions affect Japanese industrial output and capabilities? Will Canada expand operational cooperation given the apparent Japanese appetite and capability to conduct exercises? What will come out of the PMs visit from March?
SOUTH KOREA Canada–ROK 2+2 Deepens Defence Ties, Submarine Industrial Push, Defence Startup Scale-Up, Freedom Shield Set
Canada–ROK “2+2” Operationalizes Bilateral Defence Cooperation: Ottawa hosted a foreign/defence 2+2 that reaffirmed strategic alignment and produced concrete cooperation signals, including frameworks enabling deeper defence collaboration. For Canada’s DIS “Partner” lane, this could provide an umbrella for co-development, sustainment partnerships, and reciprocal industrial participation especially in naval, cyber/space, and supply-chain resilience areas. But Canada’s not the only one pursuing S. Korea, as the UAE and S. Korea ink a $35B MOU.
ROK Undersea Ambition + Canada’s Submarine Program: Seoul is moving domestically to enable nuclear-powered submarine ambitions while simultaneously campaigning for Canada’s submarine replacement.
Tensions, Defence Innovation and Export Momentum Accelerates: Tensions continue with N. Korea. Korea is standing up a defence startup pipeline (targeting 100 by 2030) while demonstrating global-scale industrial partnering (e.g., $35B UAE MOU) and combined readiness with the U.S. (Freedom Shield announced for March). For Canada, this underscores both opportunity and competitive pressure as Korea’s export machine increasingly shapes global procurement expectations.
Watch: Will Canada treat Korea as a “Partner” for submarines (local build + sovereign sustainment), and will the 2+2 produce near-term industrial deliverables?
SINGAPORE DSTA Diversification Drive, Cap Vista Battery Call, Total Defence Resilience, Digital Defence Infrastructure
DSTA Diversifies Defence-Tech Sourcing: DSTA is widening scouting to Japan, South Korea, the Nordics, and parts of Eastern Europe, pairing diversification with deeper industry “partnership” models to speed test-and-deploy. For Canada, this is a clear entry signal for dual-use suppliers positioned as alternative trusted sources. Budget 2026 includes predictable spending growth and focus.
Significant Opportunities for Innovative Dual-Use Firms: The Energy Joint Challenge seeks early detection of Li-ion anomalies and thermal-runaway containment for maritime environments, with April 2026 awards an actionable near-term pathway for Canadian battery safety, sensing, and maritime engineering firms. Other opportunities include Open Innovation Challenges with awards up to $400K.
Total Defence Emphasis Culminates 15 February: Total Defence Day anchors Exercise SG Ready 2026 (1–15 Feb), using islandwide simulated disruptions (power and digital) and SAFRA-linked activities to train civil-military readiness a practical model for critical-infrastructure resilience.
Watch: Will Canadian firms pick up on DSTA’s diversification push? Will Cap Vista’s maritime battery challenge scale into broader naval platform safety standards or programs of record such as the Victory Class Missile Corvettes?
INDIA Canada–India Reset Under Security Constraints, Mega-Scale Modernization, Naval Signalling, Co-Production Momentum
Reset + Guardrails on Security: PM Carney’s Feb 27–Mar 2 visit signals a pragmatic bilateral reset, but former national security adviser Vincent Rigby warns Ottawa cannot ignore ongoing security concerns. APF Canada is convening a Track 1.5 India–Canada defence/security dialogue in New Delhi (March 5).
Massive Force Modernization Pipeline: India cleared ₹3.60 lakh crore in capital acquisition proposals and signed a HAL contract for eight Dornier 228s for the Coast Guard reinforcing a procurement surge that will shape Indo-Pacific balance
Maritime Coalition-Building at Scale: India’s International Fleet Review 2026 and MILAN 2026 exercise underline New Delhi’s intent to lead multilateral naval signalling important context for Canada’s Indo-Pacific naval planning and partner interoperability.
Source: Government of India Industrial Co-Production Accelerates (France Model) + Indigenous Platforms: India–France defence dialogue renewed a 10-year cooperation frame with Rafale/missile co-production ambitions. India also commissioned INS Anjadip (indigenous ASW shallow-water craft), reinforcing the “Make in India” direction that will increasingly shape partnership terms.
Watch: Will the Carney visit and APF Track 1.5 in Delhi produce concrete defence deliverables without triggering renewed security blowback?
AUSTRALIA AUKUS Industrialization Accelerates, Indo-Pacific Presence Signalling, Defence Innovation + Munitions/CUAS Capacity
AUKUS Undersea Build-Out Moves to Long-Lead Execution: Australia committed major funding to progress the Osborne nuclear-sub shipyard, hosted UK SSN HMS Anson for a maintenance period in Western Australia, and approved long-lead nuclear-propulsion items hardening the regional SSN sustainment/production ecosystem.
Persistent Indo-Pacific Operational Signalling: ADF executed visible maritime/air activities, HMAS Toowoomba South China Sea transit, trilateral maritime cooperative activity with the Philippines and US, and RAAF P-8A missions from the Philippines, under a 2026 Regional Presence Deployments rhythm aligned with Canada’s Free and Open Indo-Pacific maritime posture.
Industrial Mobilization, Munitions, Venture Capital, Autonomy/CUAS: Australia launched an energetic materials R&D network for GWEO capacity, sought up to A$500M VC co-investment for defence innovation, ran AUKUS “Maritime Big Play” autonomy/UUV/EW experimentation, and signed a 3-year DSTG–DroneShield counter-drone R&D partnership.
Watch: How will infrastructure investments be rolled out and who will manage them? Is there an opportunity to cooperate with Australia on energetics and materials? Does action on Pillar 2 mean it’s maturing into something useful? What will come out of the PMs visit from 3 March?
NEW ZEALAND Force Modernization on Drones + Tech Futures, Pacific Ops Tempo, Readiness and Governance Reforms
Modernization Direction, Drones + Long-Range Tech Outlook: NZ signalled a practical unmanned pathway, buying and trialling NZ-made air/land/sea drones alongside a Long-Term Insights Briefing on defence technology beyond 2035. For Canada, this frames interoperability expectations in a Five Eyes-adjacent partner and highlights UxS collaboration channels.
Source: Government of New Zealand Pacific Operational Activity: NZDF ran a tri-service South-West Pacific deployment (Operation Calypso with HMNZS Canterbury) and investigated a reported HMNZS Manawanui fuel sheen.
Watch: Where are there common areas of interest between NZ and Canada between the Long-Term Insights Briefing and the Defence Industrial Strategy? Human Machine Teaming, UxS see a logical starting point.
OTHER REGIONAL DEVELOPMENTS
Indonesia — KRI Bima Suci Confirms Transatlantic Voyage: On February 25, the Indonesian Navy confirmed that KRI Bima Suci will depart Surabaya in March 2026 on an international goodwill voyage under Operasi Kartika Jala Krida 2026, (Thanks to Fauzan Malufti for flagging!) crossing the Mediterranean and Atlantic to call at Norfolk, Baltimore, New York, and Boston in the United States, as well as Saint John, Canada, before returning by October 9, 2026.
Source: Indonesian Government Vietnam — 3rd International Defence Exhibition: On February 26, Vietnam’s Ministry of National Defence held a preparatory conference for the 3rd Vietnam International Defence Expo, themed “Peace, Friendship, Cooperation and Development,” to be organized on a larger scale with live field demonstrations, product exhibitions, and business networking. The expo signals Vietnam’s growing ambition as a defence industry player.
Malaysia — “Future Force” Military Transformation Amid South China Sea Pressures: The Malaysian Armed Forces positioned the “Future Force” development phase (2026–2030) as the central thrust of military transformation. Malaysia’s navy is set to receive Norwegian-made anti-ship and land-attack missiles, with Turkey’s Atmaca anti-ship missile system also expected by 2028.
Philippines — Fleet Modernization Accelerates Amid Fighter Deadlock: The Philippine Navy commissioned OPV BRP Rajah Sulayman (PS-20) at Subic Bay on February 24, delivered nearly five months early by HD Hyundai, with Canadian firm GeoSpectrum Technologies supplying towed-array sonar for three of the six OPVs. The $5.58B F-16 Block 70/72 negotiation remains stalled on funding, though the U.S. Philippine Enhanced Resilience Act may unlock fiscal space.
Events:
APF Canada Track 1.5 India–Canada Dialogue | 5 March 2026 | New Delhi |
Asia Pacific Maritime (APM) 2026 | 25–27 March 2026 | Singapore (Marina Bay Sands) |
CADSI Canadian Armed Forces (CAF) Outlooks 2026 | 7–9 April 2026 | Ottawa |
DSA and NATSEC Asia 2026 | 20–23 April 2026 | Kuala Lumpur |
Singapore Maritime Week (SMW) 2026 | 20–24 April 2026 | Singapore |
AUSA LANPAC Symposium & Exposition 2026 | 12–14 May 2026 | Honolulu |
Indian Ocean Defence & Security (IODS) 2026 | 26–28 May 2026 | Perth |
CANSEC 2026 | 27–28 May 2026 | Ottawa (EY Centre) |
Shangri-La Dialogue (IISS Asia Security Summit) | 29–31 May 2026 | Singapore |
Naval Defense Philippines / PhilMarine 2026 | 17–19 June 2026 | Manila (SMX Convention Center)
SANS Cyber Defence Singapore 2026 | Starts 29 June 2026 | Singapore
Accelerated Procurement, Grants & Diversification Opportunity Tracker
Update Forthcoming in Future Editions…