Canada X Indo-Pacific Edition 2
September 30th - October 14th 2025
Introduction
Welcome to the second edition of Canada X Indo-Pacific. This week we look at two things:
Sea changes happening in Canada’s defence sector and what they mean for Indo-Pacific firms looking to tap Canada’s growing market and;
Developments in the Indo-Pacific relevant to firms looking to expand in the region covering Singapore, Australia, Korea, Japan and others.
Canada - A Growing Defence Budget Changes Everything
What Happened:
Canada is looking at $57.8B in spending by 2029/2030, of which at least ~20% should be CAPEX on new equipment, and an even more ambitious NATO pledge of 5% of GDP by 2035
Defence Investment Agency launched and will handle procurements >$100M
Minister of Foreign Affairs Anand is travelling to Singapore and India (Oct 12-17)
Minister of International Trade Sidhu met Singapore’s Deputy PM
Against backdrop of calls for diversifying sources of supply for defence goods in Canada, the US Defense Security Cooperation Agency notifies Congress of Canada’s intent to acquire the HIMARS system
Watch For:
How the government addresses procurements <$100M. This will tell you how serious the government is about reform and moving faster on procurement.
What’s the next step with Hanwha’s CPSC bid and when will there be a significant delegation sent to South Korea? What other signals are there that Canada is serious about diversifying its supply base?
Will Minister Anand’s trip set the stage for greater defence and security cooperation and trade with Singapore and India?
What You Should Do:
If you’re from a stable, like-minded Indo-Pacific country, you should be exploring opportunities in Canada. This includes familiarizing yourself with the decision-making styles and defence and foreign policy priorities. Identify ongoing procurements, and working to turn it into opportunities for a direct sale or complementary capabilities. In the case of HIMARS, will there be opportunities for providers of fire control, sensors, data processing, logistics etc?
Singapore - Punching Above its Weight & Scouting for Advanced Defence Tech
What Happened:
DSTA called on to offer rapid procurement pathways to “skip the queue” and “scout” for early stage and promising technology partners
New defence cooperation agreement signed with Australia includes fighter training access and deeper technology cooperation, specifically technology demos on Operation Trident
Singapore getting attention for role as critical submarine cable hub as Bifrost subsea cable comes online
Watch For:
Will there be any public comms on new rapid procurement tools from DSTA?
What technologies are likely to be included in testing during exercise Trident?
What sort of measures will be adopted to protect sub-sea infrastructure? What is public messaging on this topic?
What You Should Do:
If you’re a company looking to export, Singapore’s willingness to move quickly on procurement with small suppliers should get your attention. If you’re a policy maker looking to deepen defense technology cooperation, take note of the integration of fielding and testing of equipment into joint exercises between the Australians and the Singaporeans. Exploring opportunities to do the same should be at the top of your agenda.
Australia - Combining Operational Cooperation with Industrial Outcomes
What Happened:
Australia works toward defence and security cooperation agreement with India covering submarine rescue, maritime security, and defence industrial cooperation
Enhanced training facilities access and technology cooperation with Singapore (covered above)
Watch For:
How will Australia respond to India’s offer to repair Australian Navy ships in Indian shipyards while on deployment to the Indian Ocean?
What You Should Do:
Could Canada replicate this playbook when signing up for exercise participation in the region? Would doing so increase the chances for industrial cooperation and trade diversification?
Japan - Political Transition Sets Defence Direction
What happened?
Palace intrigue as the opposition party moves to block Sanae Takaichi’s election as PM.
Watch For:
What are some of Takaichi’s positions on defense? Past evidence points to her being supportive of additional spending, greater interoperability with allies and promoting dual-use technologies and defense industrial cooperation
As reported by the Asia Pacific Foundation of Canada’s weekly newsletter, will PM Carney make a pit stop in Japan? If he does, will it produce substantive defence-technology cooperation discussions?
What You Should Do:
Align with Japan’s interoperability goals. Show how your systems integrate into US/Japan/Allied architectures; bring case studies. Hedge for political change. Maintain modular, adaptable proposals that can survive a regime flip.
South Korea - Defence Industrial Muscle on Display & Strong Canadian Cooperation
What Happened:
Live bid from Hanwha Ocean on CPSP still in play, what’s the next step of the process? How will Canada position itself to maximize benefits obtained, and what benefits does it want to go with the Korean bid?
KAI-KF21 fighter (joint program with Indonesia) completed more pilot testing with Indonesian Air Force
K9 howitzer deal with Norway and now Vietnam marks notable momentum for ROK and Vietnamese shift away from Russian suppliers
Bombardier 6500 airframe selected for South Korea’s next AEW&C platform, and is baseline platform for both EW program contenders
Watch For:
When and how will Canada engage with the RoK on the CPSP bid? Will Canada seek access for suppliers into Korean prime contractors to benefit from their export push?
When will the EW platform competition results be announced? Will Canada engage with ROK as a strategic partner on these files or take a more arms length approach?
What other major international efforts will bear fruit under the RoK’s export efforts?
What You Should Do:
Get familiarized with the RoK’s export ambitions and explore ways into Korean supply chains now if you are a Canadian firm. Enter the K-Oem orbit early. Offer small parallel testbeds or modules that reduce risk in Korean export bids (e.g. reliability submodules, local support).
Taiwan - Undersea Cables Under Pressure
What Happened:
Grey zone activities focused on the 24 undersea cables (14 international and 10 domestic) that link Taiwan to the rest of the world for everything from the internet to financial transactions resulting in stepped up patrols and defense
Recent Coast Guard incidents in the Dongsha Islands with incursions addressed by Taipei,
Watch For:
Other evidence of complementary grey zone operations around Taiwan and other sub-sea cable focused activities in the broader region
What You Should Do:
Does your company have solutions focused either on maritime domain awareness (surface and sub-surface) or expertise rationalizing the deployment of sea and air based assets to maximise efficiencies and coverage? Map how those solutions fit into critical infrastructure protection and monitoring.
Other Notable Happenings
Indonesia: PT PAL unveils KSOT autonomous submarine prototype
Philippines: Manila recovers Chinese underwater drone in Philippine waters
Coming in Future Editions
India, Malaysia, Thailand, New Zealand, Philippines, US
Upcoming Events
AIAC Summit (October 28-29) - Canada’s Premier Aerospace Trade Show (I’ll see you there!)
ADEX (Seoul, October 21-26) – Republic of Korea’s premier defence exhibition
Indo-Pacific (4-6 November) Australia
Defense & Security 2025 (10-13 November) Thailand
Singapore Airshow (3-8 February) Singapore (Start planning now)
What did we miss? What countries or developments should we be tracking? Reply to this email or reach out directly. Also check out CanadaxEurope for great insights from Vincent Marmion!
Mike, love the "What Happened - Watch For - What you should do" breakdown! Should be a great AIAC summit in Ottawa!