Ian Delaney's kids won't be going to Disney World this year. Dad's company, the Canadian metals firm Sherritt International, runs a nickel mine and processing plant in Moa Bay, Cuba, which belonged to Americans before Fidel Castro nationalized it. Under the new Helms-Burton Law, Delaney is considered to be trafficking in stolen U.S. property. As punishment, he can't cross the border. Nor can his wife or minor children.

Should we feel bad about this? Yes, say The New York Times and other high-minded critics of Helms-Burton. The new law, the paper laments, runs "counter to normal American standards of conduct" and "offend[s] the sovereignty of America's closest allies." Canada, Mexico and Europe are crying foul, threatening retaliatory sanctions of their own. These countries, along with American foes of Helms-Burton, also contend the law (like the U.S. trade embargo itself) deprives Cuba of liberalizing contact with the outside world. If you want democracy, they say, start with capitalism.

But Sherritt's example, and that of other Canadians who do business in Cuba, shows that these foreign operations are a caricature of competitive capitalism. Their impact is anything but subversive. Rather, they reinforce Castro's grip on power, just as American banana companies once bolstered the comprador elites of Central America. What's really "offensive" is the moral obtuseness with which the political and business elites of Europe and Canada view Castro's dictatorship, and the sanctimony with which they exploit Helms-Burton to vent cheap anti-American sentiment.

When Canadian investors come to Havana, they don't shop around for partners among the Cuban populace at large; the average Cuban can't own private property, much less engage in ventures with foreigners. All deals are negotiated with the government, often with Fidel personally. No competitive bids, no international tender offers in The Economist, just a nod from the man in charge--much as Fulgencio Batista used to cut backroom deals with U.S. firms in the Havana of the 1950s.

The Canadian government sometimes discreetly greases the wheels. Take the case of York Medical, Inc., an Ontario-based firm established recently for the express purpose of marketing Cuban-made drugs and medical equipment. Last year, Canada's foreign-aid agency paid travel and other costs for a representative of the firm to meet in Havana with Cuban biotechnology officials. The trip included a meeting with Castro at the Canadian Embassy arranged by former Prime Minister Pierre Elliott Trudeau--an "adviser" to York Medical whose relationship with Castro dates to the Trudeau government's opposition to U.S. Cuba policy. Saskatchewan's government invested almost $250,000 in York Medical and further subsidizes it by testing Cuban diagnostic equipment in a provincial public hospital.

Cuba's Foreign Investment Law forbids Cubans from going to any foreign- owned mine or hotel to ask for a job. Nor, of course, are there free Cuban labor unions to bargain for the workforce collectively. Rather, Canadian companies agree in advance to hire their Cuban workers through the island's national employment agency, which is controlled by the Communist Party-- and vets workers for political obedience. Simon Cooper, a Canadian hotelier on the island, told The Globe and Mail that he makes sure not to be "perceived as contracting directly with individuals [or] encouraging a free market in any way."

So much for liberalizing contact. What's more, Canadian firms don't pay Cuban workers directly. They give the employment agency a per-worker fee--in U.S. dollars--of which the vast majority is pocketed by the Castro regime. The Cuban state-run Geominerca enterprise, for example, gets $2,700 per month for each Cuban geologist employed by Canada's MacDonald Mines. (MacDonald is developing gold deposits from which the Cuban government could realize half of all profits.) The geologists get 350 Cuban pesos from the government--less than $10 at black market exchange rates. Foreign firms must set aside a modest number of dollars for "incentive" payments to workers, but this doesn't nearly make up the difference.

Delaney, the largest Canadian investor in Cuba, may be the most egregious beneficiary of this cozy system. In September 1990, he engineered a hostile takeover of Sherritt and its shuttered Alberta nickel refinery. The plant had gone bust for lack of a cheap source of raw material. Meanwhile, the Soviets were pulling out of Cuba, and Castro was stuck with his own moribund nickel mine: Moa Bay, which the U.S. firm Freeport Sulfur built for $75 million, only to have it nationalized in 1959 and run into the ground by Soviet and Czech advisers. In January 1991, Delaney flew his corporate jet to Havana and cut a purchase deal with the comandante en jefe. Along with millions in working capital, Delaney brought the appropriate political sensibility to the table. Of Castro, he has said: "You don't keep his job by being a repressive dictator. You keep his job because you have a deeply felt sense of national pride and unity. He's charismatic, charming, a terrific listener whose depth of knowledge is very good."

Sherritt's management practices have brought Moa Bay back up to the level of production Freeport once envisioned. Cuban nickel output climbed from 26,000 tons in 1994 to 44,000 tons in 1995. Castro's regime profits from its share of the $16 million annual payroll at Moa Bay. As of December 1994, it also gets half the earnings, which totaled $26.6 million in 1995, from sales of finished nickel made by Sherritt's refinery in Alberta. Before his U.S. visa was revoked, Delaney said he planned to invest $165 million more in Cuba over the next five years. He is buying into hotels and recently paid Castro $10 million for oil deposits claimed by a U.S. firm.

Cuban workers at Canadian firms are, to be sure, treated a bit better than those who drudge away in wholly state-run Cuban enterprises. Sherritt gave miners overalls, hard hats, steel-toed boots and new washrooms. The company is also investing in an environmental cleanup of the Moa Bay operation, because residents have told Canadian reporters of stinging rust- colored smoke pouring from the plant's chimneys and metal-laced mine run- off flowing into the bay.

Nevertheless, Canadian investors in Cuba sound defensive about their participation in a labor system no Canadian worker would tolerate for five minutes. Just as Castro's academic apologists cite Cuba's allegedly bountiful social services to extenuate Castro's political repression, so Canadian businessmen invoke free Cuban healthcare to rationalize their exploitation of cheap, government-supplied Cuban labor. Cooper, for one, told The Globe and Mail that Cuba is "a cradle-to-grave socialist country that takes care to one degree or another of all the needs of its people. I wouldn't presume to judge the degree to which the population is or isn't exploited."

Delaney, too, poses as a protector of Cuba's egalitarian status quo. "If we were paying them directly, would it be better?" he mused to The Globe and Mail. "You can have a long, long social debate about that ... if we went in and put all the employees on a dollar wage, it would destroy the social fabric of Moa Bay. You would have a two-tier society and that's not in our interest." Ian Delaney is not one for long, long social debates. As the Toronto Star put it, "doing business with a dictator has been a rewarding personal and business experience." "I only have two responsibilities," he said. "That is to keep the balance sheet solvent and get the strategy right."

Trying to contain the ire of Canada and other Western governments, the Clinton administration has said it will postpone implementation of some Helms-Burton provisions, pending a campaign to convert the allies to its cause. One idea is to apply to Cuba a version of the Sullivan Principles, the code of humane conduct for U.S. businesses in South Africa during apartheid. It's hard to see how democratic governments could object to this, but they'll probably try.

President Clinton got tough on Western subsidization of Castro only after the Cuban air force shot down two Cuban-American civilian planes in international airspace last February, threatening to make Cuba an election issue in 1996. But Clinton's lonely stand is the right one, whether he sincerely believes in it or not. Helms-Burton may not be the most surgical instrument. Certainly it's not the most diplomatic. But throwing Cuba open to Ian Delaney and his ilk is no solution, either. When it comes to dealing with Castro, it is our neighbors to the north who occupy the moral low ground.

(Copyright 1996, The New Republic)