The announcement comes after US officials said a Chinese spy balloon was found hovering over the western US state of Montana.
Canada has said that it was cooperating with the United States to track a high-altitude surveillance balloon. Canada also added that it was monitoring a "potential second incident".
"A high-altitude surveillance balloon was detected and its movements are being actively tracked," Canada's defence department said in a statement on Thursday.
"Canadians are safe and Canada is taking steps to ensure the security of its airspace, including the monitoring of a potential second incident."
"Canada's intelligence agencies are working with American partners and continue to take all necessary measures to safeguard Canada's sensitive information from foreign intelligence threats."
The Pentagon said earlier Thursday it was tracking a Chinese spy balloon flying high over the United States.
A US official said the balloon had flown over the northwest United States, where there are sensitive airbases and strategic nuclear missiles in underground silos.
The Canadian statement did not reference China.
China working to verify facts
China said on Friday that it was working to verify the facts around US claims that Beijing flew a spy balloon over its territory, warning against "making conjectures" over the issue.
Relations between China and the US were tense just days ahead of a rare visit to Beijing by top US diplomat Antony Blinken.
"Verification is under way" over the reports, foreign ministry spokeswoman Mao Ning told a regular briefing, adding that "until the facts are clear, making conjectures and hyping up the issue will not help to properly resolve it".
"China is a responsible country and always abides strictly by international law. We have no intention of violating the territory or airspace of any sovereign country," she said.
"(We) hope that both sides will handle (the situation) with mutual calm and prudence," she added.
READ MORE: 'Chinese spy balloon' spotted over western US