Saudi Arabia suspended new trade and investment with Canada after that country's foreign ministry urged Riyadh to release arrested civil rights activists, it said in a statement released by the official Saudi Press Agency on Sunday.
The Kingdom will also freeze "all new business" with Canada..
"The kingdom of Saudi Arabia. will not accept interference in its internal affairs or imposed diktats from any country, "said the Saudi Foreign Ministry on Monday". Canada has been pressing the Kingdom to release them immediately.
The Saudi foreign ministry voiced anger over the Canadian statement.
This is the latest in an ongoing dispute over jailed blogger Raif Badawi that appears to have been escalated by a tweet on Friday from Global Affairs Canada.
Last Wednesday, Human Rights Watch said Saudi Arabia had arrested women's rights activists Samar Badawi and Nassima al-Sadah, the latest two to be swept up in a government crackdown on activists, clerics and journalists.
"These fearless women represented the last vestiges of the human rights community in the country, and now they too have been detained", Amnesty International's Middle East research director Lynn Maalouf said in a statement.
Chelsea 'call off Thibaut Courtois transfer to Real Madrid'
The Daily Express reports that Chelsea have now weighed their options and saw reasons Courtois will not be departing this summer. Cesc Fabregas is doubtful for the game after picking up a knee injury in a friendly against Arsenal on Wednesday.
"The rupture in Saudi diplomatic relations with Canada reinforces how the "new" Saudi Arabia that Mohammed bin Salman is putting together is in no mood to tolerate any form of criticism of its handling of domestic affairs", said Kristian Ulrichsen, a fellow at Rice University's Baker Institute in the United States.
Saudi Arabia is one of Canada's biggest export markets in the Gulf region and more than 15,000 Saudi students attend Canadian schools and universities. More than a dozen women's rights activists have been targeted since May.
Badawi's wife Ensaf Haidar has been granted asylum by Canada, where she is raising their three children now aged 14, 13 and 10 as a single mother.
"Any further step from the Canadian side in that direction will be considered as acknowledgment of our right to interfere in the Canadian Domestic affairs", the statement reads.
"The Ministry also affirmed that the Canadian position is an explicit and transparent interference in the internal affairs of the Kingdom of Saudi Arabia", the ministry said.
The move follows vigorous calls by Canada for the immediate release of activists that have been detained.
"We are seriously concerned by these media reports and are seeking greater clarity on the recent statement from the Kingdom of Saudi Arabia", said Marie-Pier Baril.