Cuba’s Economic Crisis Threatens Canadian Investments Amid U.S. Pressure

Havana, Cuba – A deepening economic crisis in Cuba, exacerbated by U.S. Sanctions and internal challenges, is putting significant strain on commercial relationships with key partners like Canada. Cuba’s Deputy Minister of Foreign Affairs, Carlos Fernández de Cossío Domínguez, recently urged Canada to maintain its commercial ties, but growing financial risks and deteriorating economic conditions are prompting Canadian businesses to reassess their investments.

Canada’s Longstanding Relationship with Cuba

Since 1972, Canada has been a major economic partner for Cuba, becoming its largest foreign investor after Spain and its primary source of tourists. According to de Cossío, who previously served as Cuba’s ambassador to Ottawa, the relationship has historically been able to navigate political differences through dialogue and mutual respect. “There are essential trade relations. There is foreign investment,” he stated.

Mounting Risks and Program Closures

Despite de Cossío’s appeal, the outlook for increased Canadian investment is bleak. Canada recently issued latest advice to companies considering opportunities in Cuba, warning of “payment risks” due to an “ongoing liquidity crisis.” the Canadian Commercial Corporation (CCC), which has facilitated Canadian business entry into the Cuban market, ended its Cuba program on January 1, 2026, citing a combination of rising financial risk and deteriorating economic conditions. CCC spokesperson Liane Cerminara stated the program facilitated $1.8 billion in sales of Canadian goods and services to Cuba since 1991.

Fuel Shortages and Economic Collapse

Cuba is currently grappling with severe shortages of fuel, electricity, water, and essential goods. De Cossío attributes these problems to a U.S. Fuel blockade, arguing that the blackouts are “not a result of Cuban inefficiency…but because the United States is depriving Cuba of fuel.” Though, critics suggest mismanagement and ideological factors also contribute to the crisis.

Impact on Canadian Companies

Several Canadian companies have significant investments in Cuba, particularly in tourism, and mining. Sunwing, through its subsidiary Blue Diamond Resorts (now Royalton), expanded to nearly 9,000 hotel rooms on the island by the time of the pandemic. However, tourism has declined, with hotels facing shortages of food, electricity, and water. Airlines have also cancelled flights due to fuel shortages.

The largest Canadian operation in Cuba is the Moa nickel and cobalt mine, a joint venture between the Cuban government and Toronto-based Sherritt International. Sherritt reported a debt of $344 million USD owed by the Cuban government as of last year, and operations are currently frozen due to lack of fuel.

Legal and Political Risks

Beyond the immediate economic challenges, Canadian companies face legal risks related to properties confiscated after the Cuban Revolution. Many hotels operate on land seized from private owners, potentially exposing companies to claims under U.S. Law. The U.S. Administration’s stance is likely to play a significant role in any future transition or economic opening in Cuba, and may not favor companies perceived as benefiting from expropriated property.

U.S. Stance and Potential for Regime Change

U.S. President Donald Trump has escalated rhetoric against Cuba, and reports suggest his administration is seeking the removal of President Miguel Díaz-Canel. However, Cuba’s Deputy Minister of Foreign Affairs, Carlos Fernández de Cossío, has “categorically” rejected any negotiations regarding the fate of Díaz-Canel or changes to Cuba’s political system.

Cuba’s Military Preparedness

Amidst rising tensions, Cuba has affirmed its readiness to defend its sovereignty. Carlos Fernández de Cossío stated, “Our country has historically been ready to mobilize, as a nation as a whole, for military aggression.”

The situation remains fluid, with the future of Canadian investments and Cuba’s economic stability hanging in the balance.