In a tweet from Saudi Airlines, the suspension will come into effect on August 13.
The same statement also recalled the Saudi's own ambassador to Canada back to Riyadh "for consultation", and halted all business and investment transactions between the two countries.
Officials said they would cover cancellation fees, issue refunds and find alternative flights for stranded travellers, according to a story on the CBC National website.
Riyadh said that amounted to "a blatant interference in the Kingdom's domestic affairs, against basic global norms and all worldwide protocols".
"For Saudi Arabia to punish Canada, it's fairly easy because we're not an important country for them, either are they for us", he said, adding that it does send a message to others that it will not accept criticism.
"It's estimated to be about 100,000 (barrels per day), and that's down over the past two years", McTeague said of Saudi Arabia's oil exports to Canada.
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?
Traders said they had received an official notice from the Saudi Grains Organization (SAGO) about its decision.
Among those reportedly still being held, in addition to Badawai, are Hatoon al-Fassi, a leading voice for women's participation in civil life; human rights defender Khaled al-Omair; women's rights activists Loujain al-Hathloul, Eman al-Nafjan, Aziza al-Yousef, Nouf Abdulaziz and Mayaa al-Zahrani; Ms Hathloul's 80-year-old lawyer, Ibrahim al-Modaimeegh; and the activist Abdulaziz Meshaal.
"It shows the real colours of the regime, and the worldwide community should toughen its tone against the Saudi government", she said. The United Arab Emirates, Bahrain and Palestinian Authority also voiced support for Saudi Arabia, as did Cormoros, Djibouti and Mauritania.
Saudi Arabia gave Canada's ambassador in Riyadh, Dennis Horak, 24 hours on Monday to leave the country, declaring him persona non grata. The Saudi recall affects students receiving scholarships from that government.
The Saudi government plans to move them immediately to other schools in countries like the USA and United Kingdom.
"We continue to encourage the government of Saudi Arabia to ensure all are afforded due process and to provide information on the charges and case status of legal actions against activists", she said. She is also the sister of Raif Badawi, a jailed rights blogger who has gained global recognition.
Riyadh accuses Ottawa of meddling Riyadh accused Ottawa on Tuesday of interfering in its internal affairs. In 2015, Riyadh recalled its ambassador to Sweden and stopped issuing work visas for Swedes after the European Union member country's foreign minister described the Badawi court decision as "medieval" and the kingdom's ruling Al Saud family as presiding over a "dictatorship".