The Kingdom will also freeze "all new business" with Canada.
A statement released by the Saudi Press Agency said the foreign ministry gave the Canadian ambassador 24 hours to leave the country and recalled its own ambassador to Canada, adding it retained "its rights to take further action".
Jackie Hansen, a gender rights campaigner for Amnesty International Canada, said last Thursday that the circumstances of the arrests were still unclear and there was no news of any charges. Freeland called for Badawi's "immediate" release and said Canada would continue to advocate for the release of both siblings.
The Saudi foreign ministry called the use of "immediately release" in Canada's tweet "unfortunate, reprehensible, and unacceptable in relations between states".
The ministry called the Canadian statement a blatant interference in the Kingdom's domestic affairs, against "basic global norms and all worldwide protocols".
Representatives for Canada's foreign department didn't respond to a request for comment.
Saudi Arabia is one of Canada's biggest export markets in the Gulf region and more than 15,000 Saudi students attend Canadian schools and universities.
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According to an archived government website, Saudi Arabia is now Canada's second largest export market in the region, receiving $1.4 billion in Canadian goods in 2017.
The human rights group's Middle East research director described the arrests as part of a larger crackdown on human rights in Saudi Arabia.
"Any further step from the Canadian side in that direction will be considered as acknowledgment of our right to interfere in the Canadian domestic affairs", said the statement.
"The Kingdom views the Canadian position as an affront to the Kingdom that requires a sharp response to prevent any party from attempting to meddle with Saudi sovereignty", the statement said. "Canada stands together with the Badawi family in this hard time, and we continue to strongly call for the release of both Raif and Samar Badawi". Samar Badawi is the sister-in-law of Raif Badawi's wife Ensaf Haidar, who lives in Canada and recently became a Canadian citizen.
The arrests were in line with Saudi laws, and those detained have been provided with due process during investigation and trial, according to the foreign ministry statement.
In April, Canadian Prime Minister Justin Trudeau expressed his "serious concern" over the continued jailing of Badawi to Saudi King Salman.