Capitalism underpins Canada’s relationship with Cuba

Has Canada been a “friend” to Cuba?

While Ottawa’s position towards Fidel Castro’s Cuba was far more progressive than our southern neighbour’s, the story is more complicated than liberals are likely to suggest in their commentary over Castro’s passing.

Canada did not play a central role in U.S. efforts to squash the social reforms and independence of the island nation. Rather than participate in hundreds of CIA assassination attempts on the life of Fidel, Prime Minister Pierre Trudeau declared “Viva Castro” during an official trip to Cuba in 1976. But, there’s a little-known unsavory side to Canadian relations with Cuba.

Business is business seems to be Canada’s slogan for relations with Cuba from the U.S. occupation in 1898 through the dictator Batista to Castro’s revolution in 1959.  In 1900 the Canadian Journal of Commerce noted: “Canadian capital and clearer northern brains” were turning Cuba into a “modern hive of industry.” A few months after the U.S. began its 1898-1902 occupation the Royal Bank opened its first branch in Havana. According to one bank history: “[Royal Bank] General Manager, Mr. E.L. Pease, took a quick trip to Cuba at the end of the Spanish-American War and got in on the ground floor of banking there; his American friends, who put capital into the bank, helped him to expand there. (The bank was appointed agent for the payment of claims of the Army of Liberation.)” Before his trip to Havana Pease asked Henry White of New York’s Chase National to “smooth the way through the American authorities.” And once in that beautiful city Pease befriended U.S. Consul Joseph Springer, who indicated that the U.S. planned to reform Cuba’s financial sector. (It was relatively easy for the Royal to get priority of place because, until 1914, national U.S. banks were forbidden from establishing foreign branches.)

The Canadian bankers saw themselves as American and after the U.S. occupation formally ended they felt covered by the protective umbrella of the Platt amendment. (Inserted into the Cuban constitution by Washington, the Platt amendment gave the U.S. the right to intervene on the island whenever necessary). “The United States authorities have the affairs of the Island well in hand at the present time,” Pease told the Financial Post in 1907. Royal Bank branches sprouted up across the island, usually along the newly built railroad through central Cuba. “The bank consciously established its branches wherever it could facilitate the spread of foreign investment entering Cuba.” The Royal Bank’s best customer was Canadian businessman William Van Horne’s Cuba Company and its offspring, the Cuba Railroad. Famous for his role in constructing the Canadian Pacific Railway, Van Horne “took advantage of Spain’s defeat and his influence in U.S. financial circles to start building a trans-island railway before any government had the power to stop him.” Van Horne had two U.S. generals sit on the company’s board and “land for the railroad was not purchased, but seized by the [U.S. military].” Van Horne also benefited from Cuba’s postwar railway law. He and a colleague wrote it. The Cuban railway was completed in 1902 and Van Horne proceeded to purchase tramways and sugar mills on the island.

With a wave of foreign investment into Cuba, business was good for the Royal Bank. By the mid-1920s, the Royal had 65 branches in the country. Popularly known as “Banco de Canada” during this period, “the Canadian bank acted as Cuba’s de facto central banker.” A quarter century later, Canadian banks still controlled 28 percent of total deposits in commercial Cuban banks. U.S. interests controlled 36 percent and Cuban interests 35 percent. Beyond banking, Canadian insurance companies sold two-thirds of the country’s total annual premiums in the mid-1950s, while the Cuban- Canadian sugar company owned 66,000 acres and 2,720 head of cattle. Another Canadian-owned ranch covered 75,000 acres and the Canada- Cuba Land and Fruit Company ran 100 tobacco plantations.

“Since Canada’s ties with Cuba are primarily commercial,” External Affairs advised the Canadian ambassador to Cuba in March 1949 that his two “main duties” were to defend Canadian commercial interests and increase trade opportunities on the island. Ottawa’s focus on Canadian commercial interests helps explain the embassy’s attitude to the pro-capitalist dictator, General Fulgencio Batista. Twenty months before the brutal despot was overthrown, the Canadian ambassador said Batista was “still the best hope for the future” because he “has offered the stability demanded by foreign investors.” A year earlier the Canadian ambassador said “the benevolence of President Batista is not to be questioned. He may be lining his pockets at Cuba’s expense but it is traditional for Cuban Presidents to do so and it is in part made necessary by the uncertainty of political life here. But as a dictator he is a failure, if the standard is Hitler or Mussolini. Public protests against the regime are possible; an opposition is in existence and is weak only because of fundamental weaknesses in the personalities of the opposition.”

After Batista’s downfall in January 1959 the new government tried to gain greater control over the economy. Among other steps, U.S. banks were nationalized without compensation. Canadian banks were also nationalized, but more amicably — with compensation. In response to these moves by the new Cuban government, U.S. hostility rose and Uncle Sam eventually cut off trade and diplomatic relations with the country. The U.S. also supported an invasion of Cuba, which Ottawa endorsed. Just days after the CIA-backed Bay of Pigs invasion, Prime Minister John Diefenbaker claimed Castro was a threat to the security of the hemisphere.  On April 19, 1961, he told the House of Commons that events in Cuba were “manifestations of a dictatorship which is abhorrent to free men everywhere.”

Despite tacit support for U.S. actions against Cuba Ottawa never broke off diplomatic relations, even though most other countries in the hemisphere did. Three Nights in Havana explains why Ottawa maintained diplomatic and economic relations with Cuba: “Recently declassified State Department documents have revealed that, far from encouraging Canada to support the embargo, the United States secretly urged Diefenbaker to maintain normal relations because it was thought that Canada would be well positioned to gather intelligence on the island.” Washington was okay with Canada’s continued relations with the island. It simply wanted assurances, which were promptly given, that Canada wouldn’t take over the trade the U.S. lost.

Ottawa has not let Washington down in regards to intelligence gathering. For nearly half a century Canada has spied on Cuba. Since the start of the 1960s the Communications Security Establishment (CSE), an intelligence department of the federal government, has listened to Cuban leaders secret conversations from an interception post in the Canadian embassy in Havana. A senior Canadian official, close to Washington, “admitted that the U.S. made ‘far greater use’ of our intelligence during the [October 1962] Cuban Missile Crisis than has been revealed.” Pentagon and State Department sources cite the U.K. and Canada as the only countries that “supply any real military information on Cuba” with Canada providing “the best” military intelligence. Canada has even spied on Cuba from outside that country. The CSE wanted to establish a communications post in Kingston, Jamaica, to intercept “communications from Fidel Castro’s Cuba, which would please [the US government’s] NSA to no end.”

To paraphrase Charles de Gaulle, perhaps Canada does not have friends, only interests. But the reality of Canada’s “interests” in Cuba have always been based on what’s best for the ruling class, not those of ordinary people.

Hasta la victoria siempre!

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