Canada is set to strengthen cooperation with Malaysia in the field of security as well as trade and investment, said Canadian Prime Minister Stephen Harper.

The prime minister said he understood the potential for security cooperation during his visit to the Malaysian Maritime Enforcement Agency's headquarters yesterday.

We also witnessed the signing of commercial contract by OSI Maritime System Ltd with Malaysian Navy today, he said at a joint media conference with Malaysian Prime Minister Datuk Seri Najib Tun Razak after their bilateral talks here today.

He also noted that on economic cooperation, bilateral trade and investment was growing well.

There is tremendous upside potential in both areas, he added.

Harper also pointed out that Malaysian companies were extremely well in Canada and likewise Canadian firms in Malaysia.

Touching on Petronass 36 billion Canadian dollar liquefied natural gas project in Canada, he said the Petronas hefty investment had given a positive indication that the oil giant was looking for further investments with the Canadian government.

"We are really excited about the possibility and we also had talks on the energy sector", he added.

Both leaders also witnessed the signing of a Memorandum of Understanding on the Declaration of Intent to Sign a New Agreement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income between Malaysia and Canada.

Canadian Prime Minister Stephen Harper who is on a three day visit to Malaysia from Friday, was accorded a ceremonial welcome at the Perdana Square, here, earlier today.

Harper was greeted upon arrival by Malaysian Prime Minister Datuk Seri Najib Tun Razak at 9.30am, before the national anthems of Malaysia and Canada were played.

Harper then inspected a guard-of-honour mounted by 106 officers and men of the First Battalion of the Royal Malay Regiment.

Also present to welcome Harper were Deputy Prime Minister Tan Sri Muhyiddin Yassin, Chief Secretary to the government Tan Sri Dr Ali Hamsa, and several cabinet ministers.

The two leaders were then ushered to Level Five of the Perdana Putra building here to begin their bilateral meeting, where several memorandums of understanding are expected to be signed, followed by a joint press conference