If I create a translation item in en-ca from en-us item, I understand that there is translation relationship between the two items.
Now if I create a translation item in fr-ca from same en-us item will there be a translation relationship between the item in en-ca and item in fr-ca. If not is there a way to create this relationship?
No, in the case you cite, there will be only two translation relationships:
en-us --> en-ca
en-us --> fr-ca
You can add a translation relationship by implementing a relationship effect (in Java, implement the IPSEffect interface).
However, I’m not sure this is a wise idea. We’ve discovered that things are simpler for the user when there is a single “master copy” of the item (in this case, the en-us item). When changes are made, make them in the master copy first and then follow the translations to the other locales and adjust as necessary.