Cuba asks Canada for debt relief
Latest economic crisis spurs Havana's 3rd such request in a decade
Wracked by energy, food and medicine shortages, the Cuban government is asking Ottawa for a break on its multimillion-dollar Canadian loan to help the country weather the economic crisis, says a newly released document.
Havana has asked the federal government to restructure the $36.5 million in principal remaining on a loan administered by Export Development Canada (EDC).
The loan was made to the Banco Nacional de Cuba in 1974, to facilitate the country’s purchase of Canadian goods and services.
Some details of Cuba’s request are outlined in a heavily redacted briefing note from last August for then-finance minister Chrystia Freeland, obtained under the Access to Information Act.
At the time of the original loan, the Banco Nacional de Cuba acted as the country’s central bank, and was once headed by Che Guevara in the aftermath of the 1959 Cuban revolution. The Banco Central de Cuba took over its central-bank functions in 1997, and the Banco Nacional is now largely commercial.
A spokesperson for EDC said the loan is not in arrears, and that no decision has been made about debt relief. Zoe de Bellefeuille said Canada is working in concert with Cuba’s other international creditors on the request.
Freeland’s briefing note says this is the third time in a decade that the struggling Caribbean country has asked for help with its debt load.
See the briefing note here:
In 2015, Canada forgave $18 million in Cuban loans administered by the Canadian International Development Agency. That same year, Canada also erased late interest charges of $229 million on other EDC loans.
And in 2021, after Cuba missed some debt payments to creditor countries, the Group of Creditors of Cuba, which includes Canada, rescheduled the country’s loan repayments to ease financial pressures. The Group of Creditors of Cuba is an offshoot of the Paris Club, which is an informal group founded to help debtor countries.
The financial implications of providing debt relief to Cuba are entirely redacted in the released document from Finance Canada.
De Bellefeuille said the $36.5 million in principal is the full extent of Canada’s sovereign debt exposure to Havana. To protect commercial confidentiality, she said, “this is the extent of the information we can share about the loan.”
Global Affairs Canada has issued a travel advisory for Cuba, a popular Canadian sunspot destination in winter. The notice urges Canadian travelers to “exercise a high degree of caution … due to shortages of basic necessities including food, medicine and fuel.”
“Cuba has been experiencing nationwide power outages since October 18, 2024,” Global Affairs says. “The electrical system is vulnerable and additional outages can occur suddenly. Previous outages persist in some places and scheduled power cuts regularly take place to conserve power.”
The island’s “chronic and severe shortages of basic necessities” include food, bottled water, medication, fuel and hard currency, the advisory warns.