Trade and economic relations between Canada and Japan have been steadily expanding. With a gross domestic product of $5.7 trillion (2023), Japan is the world’s fourth-largest national economy and one of Canada’s most important economic and commercial partners. The foreign direct investment (FDI) stock from Japan into Canada is valued at $49.3 billion (2023), making Japan Canada’s largest source of FDI from the Indo-Pacific and third largest overall. Japanese subsidiaries and affiliate companies operating in Canada employ thousands of Canadians and support numerous communities.
The presence of Canadian business in Japan is significant and diverse, notably in the automotive, information and communications technologies (ICT), financial services, and forestry sectors. The stock of Canadian direct investment in Japan was valued at $4.1 billion in 2023. Japan is Canada’s fourth largest trade partner in terms of bilateral merchandise trade (2023).
Canada’s exports of merchandise to Japan totaled $15.8 billion in 2023, while imports from Japan were $20.7 billion. Mineral fuels and oils (notably, coal and liquefied propane gas), minerals (copper, iron ores and nickel), agricultural products (notably, canola seed, wheat, pork, beef and soybeans), pharmaceutical and forest products were among Canada’s largest exports to Japan, while vehicles, machinery and equipment, and scientific and precision instruments (mainly for medical use) were Canada’s largest imports from Japan in 2023.
Canada and Japan collaborate closely in the implementation and expansion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP eliminates or reduces tariffs on most key Canadian exports to Japan, including for agriculture and agri-food, seafood, forestry, and metals and mineral products. Both countries also work closely together at the WTO to defend and promote an effective, open, inclusive, and rules-based trading system.