Havana's dilapidated Jose Marti International Airport is about to get a new terminal. Fidel Castro awarded the $25.5 million project to Intelcan Technosystems of Ontario. Nothing terribly new about that: Canadian firms have invested heavily in joint ventures with Cuban state-run corporations and Castro reaps a substantial portion of the proceeds.
What's novel about the airport deal is its source of financing: the Canadian government. In default on his $11-billion debt to international banks, Castro could never borrow the cash to pay Intelcan from private credit markets. So Ottawa is advancing the money through a special export credit facility for projects that do not meet the Canadian government's own criteria for commercial viability, but do promise big sales for Canadian companies and are thus deemed in Canada's ``national interest.''
Few issues have stirred Canadians as much as the United States' Helms-Burton Law, which permits U.S. citizens to sue those who ``traffic'' in expropriated American property in Cuba. For Prime Minister Chretien, defiance of U.S.-Cuba policy is a point of pride - a cause upon which to expend not only diplomatic capital but also Canadian taxpayers' money. The U.S. Congress and the Clinton administration may denounce Canada-Cuba trade, but Chretien is quietly subsidizing it through a steadily expanding program.
Canadian aid to Cuba was suspended in 1978 to protest Cuban intervention in Africa. The ban was maintained mostly by Conservative-led Canadian governments, but lifted when Chretien's Liberals swept back into office in 1993. The rationale for Chretien's post-Cold War policy change was the familiar one of ``constructive engagement.'' Canada contends that its aid eases Cuban suffering while fostering international ``contact'' that will lead to political and economic change.
Shortly before Foreign Minister Lloyd Axworthy arrived in Havana for a meeting with Castro in February, for instance, Canada shipped to Cuba $3.2 million worth of school-notebook paper and medicine. With $200,000 of discretionary funds, the Canadian embassy in Havana provides aid to the blind, supports the Panamerican Health Organization, and helped repair homes damaged in Hurricane Lilli. The embassy provides modest funding to a Cuban group that advocates gay rights and environmentalism.
Canadian diplomats avoid open support for broader democratic reform, though they claim to help Cuba's beleaguered democrats behind the scenes. But Canada's policy faces the same problem that American ``constructive engagement'' does in China: how to transform a dictatorial regime while showering it with cash, expertise and diplomatic legitimacy. Canada thus increases its aid after Castro imprisons dissidents and shoots down two civilian Cuban-American aircraft. What signal does that send?
Castro has recently cracked down on intellectuals who strayed from the party line after meetings with foreign counterparts. Yet Canada is doggedly preparing an exchange program between Canada's Parliament and members of Castro's puppet National Assembly. Canada also plans to train Cuban judges, as if the problem with Cuban justice were a lack of expertise, not a Soviet-inspired legal code that outlaws elementary human freedoms.
Some Canadian aid programs, moreover, plainly contradict the ostensible goal of greater economic and political freedom. This month, experts from Revenue Canada will launch a $3.6-million, three-year program to help the Castro government create a new tax-collection system. To the extent private wealth exists in Cuba, it consists of the leavings of foreign tourists and dollar remittances of Miami relatives. Castro wants to get his hands on the money for two reasons.
First, banks prefer to lend to governments that can reliably tax their citizenry. Second, Castro frets about the rise of a financially independent middle class. He's right to fear this - but why a democratic Canada should be helping him to ease the dilemma is less comprehensible. Indeed, Canadian aid reinforces state dominance of tourism, mining and biotechnology. It does so not only by underwriting projects such as the new airport terminal, but also through millions of dollars worth of ``feasibility studies'' that bring Canadian firms together with Cuban state-controlled partners.
Consider how York Medical, Inc., the two-year-old Toronto-area company that holds a license from Castro's government to market five Cuban-manufactured medicines and an antibiotic-testing device, benefited from Canada's corporate welfare. Over the years, Castro has sunk millions into a grandiose biotechnology- research establishment. But he has been unable to profit from the few useful innovations this investment has yielded because socialist Cuba lacks the capacity to market them abroad.
York was conceived to fill this gap for Cuba. From the outset the company enjoyed the blessings and the subsidies of the Canadian political establishment. York's initial feasibility study for the joint venture was paid for with a $100,000 grant from the Canadian International Development Agency. CIDA even paid to fly York executives to Havana, where they closed the deal over cigars and cocktails with Castro at the Canadian embassy. The encounter with Castro was brokered by former prime minister Pierre Trudeau, who first endeared himself to Castro by making a state visit to Havana in 1976. Trudeau is a paid ``consultant'' to York Medical.
Another $200,000 in seed money for York Medical came from the Saskatchewan Opportunities Corp. The prov-incial NDP government used this publicly funded agency to lend York Medical provincially owned medical facilities to test the Cuban medical products. York Medical is no paragon of buccaneer entrepreneurship. Rather, York Medical is the archetype of Canadian-Cuban state capitalism: a Canadian-taxpayer supported private-sector vehicle that enables Castro to leverage the free world's technology and capital. Not even the Soviets ever offered Fidel a deal as sweet as that.
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