Saudi Arabia halted new trade and investment dealings with Canada and suspended diplomatic ties in a dramatic escalation of a dispute over the kingdom’s arrest of a women’s rights activist.
The kingdom recalled its ambassador to Ottawa and ordered the Canadian envoy to Riyadh to leave within 24 hours, according to a foreign ministry statement cited by the Saudi Press Agency. The loonie weakened as much as 0.3 percent to 1.3019 per U.S. dollar in early trading.
The Saudi foreign ministry cited remarks last week by Canadian Foreign Minister Chrystia Freeland and the Canadian embassy in Riyadh, criticizing Saudi Arabia’s arrests of women’s rights activists including Samar Badawi. She is a Canadian citizen whose brother Raif Badawi, a blogger who was critical of the Saudi government, was already in jail in the kingdom.
“The kingdom views the Canadian position as an affront to the kingdom that requires a sharp response to prevent any party from attempting to meddle with Saudi sovereignty,” according to the statement.
The stand-off pits a Saudi government that’s slowly opening the door to women’s rights against Canadian Prime Minister Justin Trudeau, an outspoken champion of women’s advancement, who named a gender-balanced cabinet shortly after his 2015 election.
Just two months ago, Saudi women were given the right to drive a car, yet several of the country’s most prominent women’s rights activists — including some who fought for years to drive — were arrested earlier this year on national security grounds. Women also continue to require the approval of male guardians to travel or marry — though not to obtain a driver’s license.
Representatives from Canada’s global affairs department weren’t immediately able to comment.
Saudi investments in Canada include G3 Global Holdings Ltd., a joint venture between Bunge Ltd. and Saudi Agricultural & Livestock Investment Co., which purchased the former Canadian Wheat Board in 2015. Saudi Arabia has invested about $6 billion in Canadian businesses since 2006, Bloomberg data show.
Tanks, armored vehicles and parts and motor vehicles accounted for about 45 percent of Canada’s 2016 exports to the kingdom, while crude oil and copper ores comprised about 98 percent of imports, according to a government report. Saudi Arabia supplies oil to the Irving refinery in Saint John, New Brunswick.
The arrests were in line with Saudi laws, and those detained have been provided with due process during investigation and trial, according to the foreign ministry statement.
Freeland said in a tweet Aug. 2 that she was “very alarmed to learn that Samar Badawi, Raif Badawi’s sister, has been imprisoned in Saudi Arabia,” and that “Canada stands together with the Badawi family in this difficult time, and we continue to strongly call for the release of both Raif and Samar Badawi.”
So far this year, Canada has exported C$1.4 billion ($in merchandise goods to Saudi Arabia and imported C$2 billion in imports, leaving it with a cumulative year-to-date trade deficit with the kingdom of about C$640 million, according to Statistics Canada data.
(Updates with trade details from eighth paragraph.)