Saudi Arabia has said it is freezing all new trade and investment with Canada over its "interference" in the Gulf Kingdom's internal affairs.
In a series of tweets, the Saudi foreign ministry said it was expelling the Canadian ambassador and recalling its own envoy in Canada.
The move comes after Canada said it was "gravely concerned" about the arrest of several human rights activists.
Among those arrested was Saudi-American women's rights campaigner Samar Badawi.
Ms Badawi had been calling for an end to Saudi Arabia's male guardianship system.
What did Saudi Arabia say?
The foreign ministry said it "will not accept any form of interfering" in its internal affairs.
It referred to last week's statement by the Canadian foreign ministry, which urged Riyadh to "immediately release" civil society and women's rights activists.
The Saudi ministry described Canada's position as "an attack" on the kingdom, saying it would now:
- Freeze all new trade and investment transactions between the two countries
- Consider the Canadian ambassador persona non grata and order the envoy to leave within 24 hours
- Recall the Saudi envoy in Canada
- Reserve the right to take further action
Canada's government has so far made no public comments on Saudi Arabia's diplomatic measures.
The arrests are at odds with the progressive image the government has projected this year under Crown Prince Mohammed bin Salman.
He drew widespread praise last year when they announced that the decades-old ban on women driving would end on 24 June.
Saudi women's rights activists, including those who have been imprisoned for defying the ban, had celebrated the decision.
But they also vowed to continue campaigning for the end of other laws they consider discriminatory.
Women must adhere to a strict dress code, be separated from unrelated men, and be accompanied by or receive written permission from a male guardian - usually a father, husband or brother - if they want to travel, work or access healthcare.
The Saudi crown prince has also spearheaded a sweeping anti-corruption drive which resulted in dozens of princes, government ministers and businessmen being detained in November and generated an estimated $107bn ($80bn) in settlements.