The Iceland dispute seems reasonable, but I am unsure as to how valuable Denmark saw Iceland as being, the main exports from the time seem to be fish and diatomite (a material used to stabilise explosives). I don't feel they would ally against the various allies Canada has, especially since the British Isles are so close, though I am willing to be proven wrong. A Scandinavian union would potentially be able to make for a much fairer fight, but that is assuming that they are willing to break almost 100 years of peace. On the other hand, if diatomite is rare, then maybe they would want to corner the market, or there could well be something I missed.
Regarding Japan, I do indeed stand corrected, looked it up and the British were somewhat fond of Japan for a little over a century and considered them fine trading partners. The relationship between these two would be even closer ITTL.
Look forward to reading more!
Thanks! And fair enough. The Danes may just say "meh," with regards to Iceland, but I felt that with the not too distant in the past Schleswig War would have caused Denmark to save face as a possible reason for not just dropping Iceland. Historically speaking though, the Danes were relatively accommodating of Icelandic complaints and demands.