The decision by Saudi Arabia and Canada to restore ties on Wednesday to their normal level after a five-year rift reinforces Riyadh's newly pursued soft power approach, as it attempts to stabilize its foreign relations in a way that advances its economic and defense interests.

The move, experts tell Al-Monitor, corresponds with wave of reconciliation efforts that Saudi Arabia has embarked on with Qatar, Iran, and Yemen's Houthis recently, departing from rifts that marked the policy of the last six years. But with Canada, the move secures trade, educational and defense interests that both sides share. 

Background: In 2018, the Canadian Embassy in Riyadh tweeted in Arabic calling for the release of women’s rights activists in detention in Saudi Arabia. In response, Saudi Arabia recalled its ambassador in Ottawa, expelled Canada’s ambassador and banned new trade.

Relations subsequently continued at a lower level. In November of last year, Saudi Crown Prince Mohammed bin Salman met with Canadian Prime Minister Justin Trudeau on the sidelines of the Asia-Pacific Economic Cooperation conference in Thailand. 

This prompted negotiations leading up to Wednesday's decision of restoring normal diplomatic relations and to reappoint ambassadors “on the basis of mutual respect and common interests,” according to statements from the Saudi Ministry of Foreign Affairs and Global Affairs Canada. 

“It was about time that all this was resolved,” Dennis Horak, the Canadian ambassador who was expelled in 2018, told Al-Monitor. “We’ve had a long relationship. Getting back to where we were is beneficial for both countries.”

In addition to political relations, Saudi Arabia and Canada have trade and education ties. In 2021, trade between the two countries amounted to $3.3 billion. Canada's top export to Saudi Arabia was tanks and armored vehicles, while Saudi's top export was crude petroleum, according to the Observatory of Economic Complexity. 

Furthermore, thousands of Saudi students have studied in Canada in recent years, with a particularly high number of Saudis studying medicine at Canadian universities. Thousands of Canadians live in Saudi Arabia and the Gulf, and this decision takes into consideration those aspects, Horak said. 

Why it matters: Saudi Arabia has been pursuing diplomacy with several countries recently with whom it had bad relations in the past. In 2021, Saudi Arabia and Qatar ended their yearslong diplomatic rift. In March, Saudi Arabia and Iran agreed to restore diplomatic relations in a deal brokered by China. Earlier this month, Saudi Arabia reestablished relations with Syria ahead of President Bashar al-Assad’s attendance at the Arab League summit in Jeddah. Saudi Arabia also held talks with Iran-backed Houthi forces in Yemen this year.

“Saudi Arabia is playing an increasingly active role in the region and the world. I think to be able to have a dialogue with Saudi Arabia on those issues benefits us,” said Horak, who added that the continued human rights concerns can be addressed through “dialogue.”

Thomas Juneau, professor at the University of Ottawa, said it is unclear why exactly the two sides agreed to restore ties due to neither country addressing this publicly. However, he said the decision is part of the “broader context of Saudi efforts to stabilize its foreign relations” in the past two years.

“Mohammed bin Salman has clearly understood that his very ambitious program of social and economic reforms needs stability on Saudi borders,” Juneau told Al-Monitor.

Juneau said that the Saudi-Canada relationship is relatively “low priority” for both countries, but that Saudi Arabia may have had strategic reasons to repair ties with the North American country. The ban on new trade with Canada hurt Saudi Arabia’s image as a place to do business.

“That sends a negative signal beyond Canada — that if you invest in Saudi Arabia, your interests might be at risk if your home country has a diplomatic problem with Saudi Arabia,” he said. “My assumption is that Riyadh wants to minimize that perception.”

Know more: Canada’s relations with Iran have also been strained since January 2020, when Iranian forces shot down Ukrainian International Airlines Flight 752, killing everybody on board, including 55 Canadians. Iran has said the strike was an accident, and it occurred during its conflict with US forces in neighboring Iraq.

In April, Canada referred to Iran’s legal action against the alleged perpetrators as “sham trials,” Agence France-Presse reported.

What's next: Canada has already named an ambassador to Saudi Arabia — Jean-Philippe Linteau — per its statement. Saudi Arabia did not mention who the next ambassador will be.