Saudia said it would be temporarily stopping inbound and outbound flights to Toronto Pearson International Airport – the only Canadian destination it serves – from August 13.
The announcement has prompted concerns among an influx of travellers planning to visit Mecca for the annual Hajj pilgrimage, which begins on August 19.
Last year, nearly 2.5 million worshippers descended onto the Islamic holy site, with a similar number expected this year.
Saudi Arabia has been informing customers that it has temporarily scrapped penalties and fees on all upcoming direct flights to and from Toronto, adding it is working to find alternative solutions to the problems.
The latest retaliatory move came after Canada’s ministry of foreign affairs raised concerns about the arrest of women’s rights activists in Saudi Arabia, including Samar Badawi (pictured main), sister of imprisoned blogger Raif Badawi.
Nassima al-Sada, a campaigner for civil and political rights, women’s rights, and the rights of the Shi’a minority in Saudi Arabia’s Eastern Province, has also been arrested
Saudi Arabia expelled the Canadian Ambassador Dennis Horak, who was given 24 hours to leave the country.
The Middle Eastern nation has also frozen all new trade and investment with Canada, according to the Saudi Press Agency.
The Saudi government said in a statement: “We have put on hold all new business and investment transactions with Canada while retaining its right to take further action.”
The Saudi Foreign Ministry added: “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.”
In her first public response to the escalating situation with Saudi Arabia, Canada’s Foreign Minister Chrystia Freeland said the North American country was “seriously concerned” about the Kingdom’s actions, and is “seeking greater clarity”.
She added: “Let me be very clear: Canada will always stand up for human rights in Canada and around the world, and women’s rights are human rights.”
Ms Badawi’s brother was arrested in 2012 for criticism of the regime, and was subjected to 50 lashings in 2015.
His wife, Ensaf Haidar, and three children were granted Canadian citizenship earlier this summer, and live in Quebec’s Eastern Townships.
Amnesty International noted Ms Badawi has been repeatedly targeted and interrogated by Saudi security forces for her human rights activist.
She was also subjected to a travel ban in 2014 and arrested in 2016.