A new battery supply-chain agreement between Ottawa and Tokyo is significant for both countries. Canada aims to expand its position in the battery industry, while Japan seeks access to lucrative American EV subsidies for its automakers. The agreement also reflects the two countries’ search for like-minded allies in a world characterized by increasing geopolitical tension. While specifically mentioning Russia’s invasion of Ukraine, both Canada and Japan are also looking to counter China’s economic and political dominance in the Indo-Pacific region and the global battery industry.
The deal comes at a opportune time for Canada, allowing it to showcase its growing ties with a key Indo-Pacific ally amid a deteriorating relationship with India. Japan brings valuable technology in mineral processing, as well as battery and auto companies, to the table. On the other hand, Canada brings access to critical minerals and emerging battery manufacturing capacity.
According to Natural Resources Minister Jonathan Wilkinson, there is interest from Japanese automakers to manufacture EV batteries in Canada. However, he clarifies that this agreement merely paves the way for substantive discussions on the subject.