Cuban striker Maykel Reyes tallied twice within eight minutes to put his side up by a pair in the second half.
Canadian substitute Stefan Vukovic answered with a 90th minute goal, but it wasn't enough to claw back the two-goal deficit.
"We simply need to stay positive as there is a lot of football left to play at this tournament," said Canada’s head coach Nick Dasovic after the match. "We will assess the performance and ensure that we are prepared to get the necessary result in our next game."
Canada will take on Nicaragua in its second of two group-stage matches on Feb. 22. Cuba and Nicaragua will square off on Feb. 20 in the other remaining match in Group B.
The top two teams from the pool will advance to the quarterfinal stage that determines the four CONCACAF nations that will qualify for the FIFA U-20 World Cup in Turkey in June.