With a handshake and a few conciliatory words, Prime Minister Stephen Harper is opening the door to vastly improved relations with communist Cuba, and the rest of Latin America and the Caribbean.

Mr. Harper abruptly ended his controversial policy of shunning Cuba, sitting down with the country's President, Raul Castro, for the first time over the weekend, just hours after U.S. President Barack Obama did the same.

"I have become convinced that a different approach is appropriate at this point in time," Mr. Harper said Saturday after a private meeting with Mr. Castro at the Summit of the Americas in Panama City. "We're at the point where an engagement is more likely to lead us to where we want to go than continued isolation."

Story continues below advertisement

But this isn't just about Cuba, experts say. Mr. Harper's sudden about-face could end years of strained relations that have affected Canada's dealings with countries throughout the hemisphere on everything from trade to drug smuggling, organized crime and immigration.

"He has realized grudgingly, slowly that his position was untenable," said Professor John Kirk, chairman of Spanish and Latin American studies at Dalhousie University in Halifax, and an expert on Canada-Cuba relations. "I suspect he is reading the writing on the wall and realizes that the Americans are going to move in very quickly into Cuba."

The Harper-Castro meeting could prove to be a "turning point" in Canada's relations with Cuba, as the latter moves to normalize relations with the U.S., according to Mark Entwistle, a former top federal official and Canadian ambassador to Cuba from 1993 to 1997.

"We are in a very interesting historic moment for Canadian business in Cuba," said Mr. Entwistle, who travels to Cuba regularly as a partner in Toronto-based Acasta Capital. "Now is the time to explore opportunities in Cuba and form partnerships with the Cubans."

Normalization of relations with the U.S. means a flood of competing investors could soon be pouring into Cuba, where Canada already has significant investments in tourism and mining.

And yet Cuba remains a country of missed opportunities for Canada, Mr. Entwistle argued.

The Conservative government, he said, has treated Cuba with "neutral indifference," thwarting the ability of Canadian companies to take full advantage of their access to the Cuban market. But it hardly qualifies as "isolationism," Mr. Entwistle said.

Story continues below advertisement

Mr. Harper had vehemently opposed Cuba's presence at regional gatherings, such as the Summit of the Americas, and its membership in the Organization of American States. And yet Canada played host to secret Cuba-U.S. normalization talks and has sent several ministers to Cuba in recent years. And this year, Canada is celebrating 20 years of unbroken diplomatic relations with the Caribbean nation.

Saturday's meeting was the first between a Canadian and Cuban leader since Prime Minister Jean Chrétien met Raul's brother, Fidel Castro, in Havana in 1998.

But two-way trade has been stagnant for years at roughly $1-billion – less than a day's worth of Canada-U.S. trade. In 2014, Canada exported $448-million worth of goods to Cuba, while importing $562-million.

A million Canadians travel to Cuba annually, representing more than 40 per cent of all foreign tourists.

"Canada is coming late to the party," Prof. Kirk said. "We have not taken advantage of [our access to the market]."

Calgary-based mining company Sherritt International Corp. is the largest foreign investor in Cuba, with nickel mining, oil-and-gas and electricity interests.

Story continues below advertisement

Beyond Sherritt, there are few "big ticket" Canadian investments there, Mr. Entwistle pointed out. Cuba would happily welcome much more Canadian investment – in hospitality, mining, agriculture, biotechnology and telecommunications, he said.