Prime Minister Mark Carney has spearheaded a significant push to deepen economic ties with Saudi Arabia, underscoring Canada's strategic "bet" on the Kingdom despite ongoing regional instability. The recent visit, the first by a Canadian prime minister in 26 years, resulted in the signing of 13 new commercial agreements and memorandums of understanding (MOUs) valued at over $1 billion. These deals span critical sectors including health technology, mining, infrastructure, defence, clean energy, and artificial intelligence.
This renewed engagement comes at a time when Saudi Arabia faces potential entanglements in regional wars, including a recent flare-up in Yemen. However, Canadian officials, including Prime Minister Carney, have emphasized a pragmatic approach to international relations, suggesting that engagement, rather than isolation, is key to advancing mutual interests and potentially influencing positive change. The shift in approach signals a departure from the more critical stance adopted by the previous government, aiming instead to harness economic complementarities and opportunities.
The agreements aim to leverage Saudi Arabia's ambitious Vision 2030 economic diversification plan, which includes massive investments in infrastructure, clean technology, and AI. Canadian companies are set to play a significant role, with opportunities in mining, critical minerals, and clean energy projects. For instance, MOUs signed during Carney's visit represented over $1 billion US in business, including a major mining project for Canadian firm Hatch and an AI contract for Canada's Cohere. Negotiations are also underway for a Foreign Investment Promotion and Protection Agreement, expected to be concluded by early 2027, further facilitating bilateral investment.
While diplomatic relations were restored in 2023 after a significant freeze in 2018 due to human rights concerns, Canada's current strategy prioritizes economic collaboration. Prime Minister Carney stressed that engaging with Saudi Arabia does not equate to agreeing with all of its actions, but rather a recognition of the Kingdom's global influence and economic potential. This pragmatic approach seeks to create opportunities for Canadian businesses and workers while fostering a more stable global economic landscape.
