A pro-government Saudi Twitter account then provoked outrage when it posted - and then deleted - a 9/11-style digitally altered image showing a plane flying towards the Toronto skyline.
The government also froze all new trade with Canada, and ordered approximately 16,000 Saudi students studying overseas in Canada to return home or complete their study in other countries.
Raif Badawi's wife has been granted asylum by Canada.
The kingdom will also suspend educational exchange programs with Canada and move Saudi scholarship recipients to other countries, Saudi-owned Al Arabiya reported Monday.
Saudi Arabia's national carrier Saudia has suspended flights to and fro Toronto as a diplomatic row between the Middle Eastern kingdom and Canada continued.
"We are always going to speak up for human rights; we're always going to speak up for women's rights; and that is not going to change", she told reporters in Vancouver on Monday.
In recent months Saudi Arabia has lifted a ban on women driving, but it has also arrested activists, including more than a dozen high-profile campaigners for women's rights.
Riyadh's singling out of Canada appears to be aimed at strongly discouraging other Western governments from criticising its human rights violations.
Canada's Foreign Affairs Minister Chrystia Freeland called last week for the release of civil rights activists jailed in Saudi Arabia and expressed concerns over a crackdown on political dissidents in the hardline Islamic country. "They are the best interlocutor for Canada in the region", he said.
Media captionSaudi Arabia's permanent representative to the United Nations confirmed the change in policy What has the relationship between Saudi Arabia and Canada been like in the past?
But the damage could be more significant if a $15 billion deal agreed in 2014 for Canada to sell Riyadh light armoured vehicles is scrapped, as thousands of jobs in Canada could be lost, Juneau said.
Garry Keller, who was chief of staff to ex-Conservative Foreign Minister John Baird, said the government needed to look at how it could help businesses that might be affected.