The move, which underscores a newly aggressive foreign policy led by Crown Prince Mohammed bin Salman, came after Canada demanded the immediate release of human rights campaigners swept up in a new crackdown.
Bilateral trade amounts to CAN $3-4 billion (US $2.3-3.1 billion) a year, according to Thomas Juneau, an assistant professor at the University of Ottawa.
Raif Badawi's wife has been granted asylum by Canada. The decision to freeze new trade agreements could threaten Canada's $15-billion arms deal that includes providing armoured vehicles to the kingdom, but Foreign Affairs Minister Chrystia Freeland said it was "premature" to comment on its status.
Freeland would only tell reporters Monday that the Canadian ambassador is "fine" and would not disclose his location.
Judith Dwarkin, chief economist with RS Energy Group in Calgary, says eastern Canadian refineries import about 75,000 to 80,000 barrels per day of Saudi Arabian crude. Media reports also suggest Saudi Arabia may cancel thousands of scholarships for students attending school in Canada.
'It is now time for other governments to join Canada in increasing the pressure on Saudi Arabia to release all prisoners of conscience immediately and unconditionally, ' said Samah Hadid, Amnesty International's Middle East campaigns director.
There could be a sentiment among allies that, "Finally the Trudeau government is getting poked back in the eye by the Saudis". Saudi Arabia long has been sensitive to global pressure over the Raif Badawi sentence.
The true impact of Saudi Arabia's flexing of diplomatic muscle is still unclear.
The European Commission said it's seeking clarification about the arrest of activists in Saudi Arabia.
"Canada does not understand its place and it tried to impose itself on the Kingdom's policies in its ministry of foreign affairs statement as if to place itself above other countries in the world", he said.
All of which is to say that maybe the United States, 17 years after 9/11 and the missing 28 pages, should really, finally, reconsider its relationship to the repressive, Al Qaeda-dealing Saudi regime.
Last week, Canada's Ministry of Foreign Affairs expressed concerns over the arrests of seven Saudi civil society activists.