Speaking to reporters at the Halifax International Security Forum, Peter MacKay said the violence unfolding in Egypt is "troubling" but also a symptom of the massive change still sweeping the country.
Police in Cairo are clashing with protesters who are angry at what they feel is the slow conversion from military rule to civilian government.
MacKay said the international community must offer support to Egypt and hope for a peaceful outcome.
"The situation in Egypt is ... symptomatic of the challenge that still exists in Egypt and to the same extent in other countries, including Libya," MacKay told a news conference as the annual forum wrapped up.
"Egypt, Libya, others have to be encouraged to make this transition in a peaceful way."
At least four protesters were killed Sunday as soldiers and police set tents ablaze in the middle of Cairo's Tahrir Square. Tear gas and rubber bullets were fired as part of a major crackdown on thousands of pro-democracy demonstrators.
Tensions have escalated on Egypt's streets in recent days despite the plan to hold free elections in about a week. Protesters behind the uprising say they fear the military, which took over from ousted leader Hosni Mubarak nine months ago, won't hand power over easily to an elected parliament and a new president.
"I think there is some nervousness about the fact that it is the military that is still controlling much of this process," said MacKay. "The international community is going to continue to watch this very closely."
MacKay said the world is also keeping a watchful eye on Syria and Iran. The situations unfolding in both countries generated much discussion during the three-day forum, which was attended by top security experts, as well as defence ministers and other politicians from around the world.
In Syria, President Bashar Assad continues his bloody crackdown on Syrians demanding democracy. The UN estimates 3,500 people have been killed since anti-government demonstrators began uprising in March.
MacKay wouldn't say what Canada could do about Syria. He has said any international mission might first need a UN Security Council resolution, similar to one granted for Libya this year.
"I think it's fair to say that a lot of dictators are on notice that this type of behaviour isn't going to be tolerated," he said.
"How we go about it and what comes next is done on ... an escalating scale before making any final decisions around intervention."
His position was similar on Iran.
Last week, the UN's atomic watchdog agency said Iran was more than likely on the way to acquiring nuclear weapons.
MacKay said the consequences of a nuclear Iran were "almost too dark to contemplate," but stressed military intervention would be the last possible option.
He told reporters that Canada has committed to participate in a NATO counter-terrorism campaign in the Mediterranean.
Canadian patrol frigates have been in the Mediterranean for months, part of a NATO mission begun in March to protect Libyan civilians during the last gasps of Moammar Gadhafi's brutal regime.
MacKay said the Royal Canadian Navy will stay until the end of 2012 with the primary purpose of locating, tracking, reporting and boarding vessels suspected of involvement in terrorism.
However, he said the vessels will also be capable of helping Canadians in need abroad, if necessary.
"There is no question that having a ship in the region in the event Canadians need direct assistance or evacuations gives us that utility, that capability to respond," he said.
HMCS Vancouver, already in the Mediterranean, will remain until early in the new year, when it will be relieved by HMCS Charlottetown.
— With files from the Associated Press