Canada’s Indo-Pacific Strategy: An Overview

Canada's ambitious Indo-Pacific strategy faces domestic criticism over defense spending amidst rising poverty.

by Natasha Fernando

Canada and the Indo-Pacific

The Indo-Pacific is a geopolitical construct of the regions encompassing the confluence of the Indian and Pacific oceans. Covering 40 countries, it is home to 65% of the World’s population and several large economies including: China, India, Australia, Japan and South Korea. For Canada, the region is home to six of its top 13 trading partners. Canada’s Indo-Pacific strategy announced in November 2022, outlines five strategic objectives for the region:

  • Promoting peace, resilience and security
  • Expanding trade, investment and supply chain resilience
  • Investing in and connecting people
  • Building a sustainable and green future
  • Canada as an active and engaged partner to the Indo-Pacific

Strategic Outlook

As highlighted in the report compiled by Global Affairs Canada, the region’s instability stems from the unrest in Myanmar following the military coup, Indo-Chia and Indo-Pak tensions and the escalations in the Taiwan Strait encompassing the South and East China seas. While potential aggression from North Korea has always been a concern, the most recent decision of Russia to provide military assistance to North Korea in case of armed aggression. The most worrying risk is Russia’s ability to arm North Korea with ballistic missiles and nuclear technology which has raised concerns within the NATO and UN security Council. While Canada is not a non-permanent member of the US Security Council for years 2024-2025, Canada participated in the RIMPAC naval exercises in 2024 with HMCS Vancouver sailing across the Pacific Ocean for the forward-presence mission Operation Horizon in the Indo-Pacific.

China’s rise and Canada’s response at the domestic, bilateral, regional and multilateral levels is largely featured in the strategy. Domestically, Canada will bolster defense against foreign interference, modernize the Investment Canada Act, protect critical minerals supply chains, safeguard intellectual property and enhance cybersecurity. Canada announced the spending of CAD $2.3 billion for military and cybersecurity enhancement in the region in 2022. Bilaterally, Canada will engage in dialogue with China to advance national interests, review mechanisms like MOUs, improve trade services, and protect market access. Regionally, Canada will invest in relationships and institutions, promote a peaceful and rules-based Indo-Pacific, and work with partners to counter unilateral actions in critical areas. Multilaterally, Canada will collaborate with partners on China’s global impact and invest in international governance. An example is the  15th Conference of the Parties to the United Nations Convention on Biological Diversity in Montreal in December 2022.

Partnerships and Projects

Canada’s approach to partnerships in the Indo-Pacific region involves leveraging key multilateral dialogues and forums such as ASEAN, the ASEAN Regional Forum, APEC, Shangri-La Dialogue and the Pacific Islands Forum. Canada will also strengthen existing alliances with the United States, the European Union, Australia, New Zealand, and will continue its active participation in global groupings like the G7 and Five Eyes. Prime Minister Trudeau announced to host the 51st G7 summit 2025 in  Kananaskis, Alberta. In addition, the Indo-Pacific strategy report outlines trade partnership such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Digital Economy Partnership Agreement, Canada-Indonesia Comprehensive Economic Partnership Agreement and Canada-ASEAN Free Trade Agreement.

The strategy also recognizes India as a major strategic partner for Canada due to its significant strategic, economic, and demographic importance. As Canada’s thirteenth largest trading partner with a GDP of $4 trillion, India is central to advancing Canada’s objectives in the region. The Strategy outlines initiatives to deepen economic ties through trade and investment, enhance supply chain resilience, and foster partnerships in science, technology, and innovation. Canada aims to expand market access via an Early Progress Trade Agreement and support academic, cultural, and research exchanges. Furthermore, Canada will strengthen climate change cooperation and send trade missions focused on renewable energy and clean technology. However, the recent diplomatic fallout with India after the accusation that Indian Intelligence Service infiltrated Canada to assassinate Khalistan separatist Hardeep Singh Nijjar in 2023 have strained relations. There is ongoing speculation whether Prime Minister Narendra Modi will be invited to the G7 Summit in Alberta next year.

Among the main projects featured in the strategy is FinDev Canada’s $720 million concessional finance facility to enhance investment opportunities in the Indo-Pacific. FinDev Canada is a bilateral Development Finance Institution that supports sustainable and inclusive development in emerging markets and developing countries through the private sector. Canada’s new Shared Ocean Fund, with $84.3 million will enhance maritime cooperation and create a healthy marine environment in the Indo-Pacific. This initiative aims to combat illegal, unreported, and unregulated (IUU) fishing by strengthening and enforcing regulations, protecting fish stocks, advancing ecosystem conservation, and implementing robust monitoring and surveillance measures. Canada has also pledged to allocate $492.9 million to bolster its naval presence in the Indo-Pacific and enhance the Canadian Armed Forces’ involvement in regional military exercises. However, these bold announcements, particularly those related to defense spending comes at a great expense of domestic backlash to the Trudeau government. Owen Schalk writes “as Canadians struggle to make ends meet, the Trudeau government is pumping tens of billions of dollars into the Canadian military machine”. Criticisms have been levelled at the government that poverty in Canada is on the rise with an affordability crisis, housing crisis and poor public policies that affect the common man.

Conclusion

Canada’s Indo-Pacific strategy acknowledges the region’s instability and underscores Canada’s multifaceted response to China’s rise through domestic, bilateral, regional, and multilateral actions. Strengthening partnerships with key regional players and enhancing military presence are central to the strategy, illustrated by significant investments such as FinDev Canada’s concessional finance facility and the Shared Ocean Fund. While these initiatives aim to foster stability and economic growth in the Indo-Pacific, they also face domestic criticism over the prioritization of defense spending amidst rising poverty and affordability crises at home. Balancing international ambitions with domestic needs remains a challenge for the Trudeau government as it seeks to position Canada as a proactive and engaged partner in the rapidly evolving Indo-Pacific region.

Author: Natasha Fernando is an independent analyst from Sri Lanka with research interests in the Indo-Pacific.

This article reflects the author’s own opinions and not necessarily the views of Global Connectivities.

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