Canada Eyes Saudi Funds as Part of Effort to Cut Reliance on U.S.

By Paul Vieira

OTTAWA--Canada and Saudi Arabia are in talks to clinch a bilateral investment treaty by early next year as Prime Minister Mark Carney seeks to deepen ties with the kingdom as part of his trade-diversification strategy.

Carney, speaking to reporters during a visit to Saudi Arabia, added that senior officials accompanied by leaders of Canada's big pension funds intend to travel to the Persian Gulf country in the coming months to identify new investment opportunities. Saudi Arabia's Public Investment Fund has also confirmed its attendance for an investment summit Carney is hosting in Toronto in September.

The developments represent another example of Carney realigning Canada's foreign-policy priorities, which is now focused on reducing the country's reliance on the U.S. and resetting ties with influential economic powers that previously found themselves in diplomatic rows with Ottawa.

Since coming to power, Carney has normalized economic and diplomatic ties between China and India. Carney has now added Saudi Arabia to the list. Saudi Arabia expelled Canada's ambassador back in 2018 and ordered its citizens to sell Canadian assets after the former Liberal government under Justin Trudeau chastised the kingdom's treatment of civil-society and women's rights activities.

Ottawa and Riyadh agreed in 2023 to restore diplomatic ties. Carney said his trip to Saudi Arabia was the first by a Canadian leader in 25 years, with an aim toward finding areas of mutual economic interest.

Talks on a bilateral investment treaty, which are designed to help protect investments by private parties and promote two-way trade, are on track for an agreement in the first quarter of 2027, Carney said.

He said, based on discussions, Saudi Arabia appears keen in investment opportunities in Canada focused on energy. "That's the full range in terms of commercial partnerships, from liquefied natural gas through to renewable and nuclear," Carney said. One of his priorities as prime minister is to rekindle investments in Canada's commodity sectors, as he attempts to rewire an economy struggling due to hefty U.S. tariffs and uncertainty about future trade ties with Washington.

Carney added there's also Saudi interest in infrastructure investments in Canada, and mining, especially critical minerals.

As with China and India, Carney said Canada must engage with powers even amid sharp disagreements on policy issues. "Lecturing countries from afar is an ineffective strategy. It's satisfying but it's ineffective. Engagement can be effective," he said.

"We have a pretty clear strategy of where we want to go," he added "We're trying to make the country - and I think we will do this - more resilient, more independent, and more strategically autonomous."

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

July 09, 2026 15:00 ET (19:00 GMT)