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Myanmar's pro-democracy leader Aung San Suu Kyi and Canada's Foreign Minister John Baird exit Suu Kyi's home after their meeting in Yangon.

Canada will open an embassy in Myanmar, Foreign Affairs Minister John Baird announced Friday, saying the move comes in the wake of the Asian country's efforts at democratic reform.

"Canada continues to be encouraged by the positive steps the Burmese government has taken to improve the human rights and democracy situation in Burma," Mr. Baird said.

He spoke to reporters Friday on a conference call from Bangkok.

"It is our hope that this announcement will build on our other positive developments in our relations with Burma."

Canada has never located an embassy in Myanmar before. Previously, Canadian diplomats responsible for the country have been based in Thailand.

The Canadian government, incidentally, still refers to Myanmar as Burma, its former name.

"Like many other countries – including the U.S. and the U.K. – Canada did not recognize the decision of the military regime in 1989 to change the country's name to 'Myanmar,' and we continue to use the name 'Burma'," Baird spokesman Rick Roth said Friday.

Myanmar's changes over the past year or so have seen it emerge from decades of authoritarian rule and diplomatic isolation, although it remains dominated by its military.

In April, Canada lifted the blanket sanctions it had imposed on Myanmar in an effort to encourage the country's surprisingly rapid reforms.

"We put in sanctions to try to encourage the government to change course, and they changed course in a major way," Mr. Baird said in March 2012 after visiting the country.

In Ottawa, the Conservatives, who often touted their sanctions against Myanmar as the toughest in the world, have found themselves in a sea change.

Virtually all trade or economic exchanges with Myanmar were banned.

Now almost anything goes - except that prohibitions on arms sales remain in place.

In May, U.S. President Barack Obama declared a new chapter in U.S. relations with Myanmar, easing an investment ban and naming the first U.S. ambassador to the former pariah state in 22 years to reward it for democratic reforms.

Mr. Obama pointed to the parliamentary election of opposition figure Aung San Suu Kyi as a prominent example of progress. Ms. Suu Kyi spent 15 of the previous 22 years under house arrest before her release in late 2010.

Asked about reports of ethnic cleansing of the Muslim minority in Myanmar, Mr. Baird Friday said he registered his concern during his stopover there Thursday.

"I raised the concern in two of the northern regions. One is where there's significant – significant challenges between the Muslim community and the central government in Nay Pyi Taw," the Foreign Affairs Minister said.

"I registered our significant concern and encouraged them to use strength and to seek to resolve the issue peacefully, offered any and all support that Canada could provide in this regard," he said.

"I do note that they've had 11 major challenges in parts of the country and have resolved peacefully nine of the 11 situations, is in the process of solving another one, the tenth one."