Canada’s $1-billion investment in Saudi Arabia is now under scrutiny following a series of Houthi missile attacks on key Saudi airports. On October 8, 2026, a Houthi missile struck a Saudia airliner at King Khalid International Airport in Riyadh, killing three people. This escalation prompted Global Affairs Canada to advise Canadians to avoid major airports in Riyadh and Dammam just two weeks later.
The attacks have raised doubts about the safety of Saudi Arabia as an investment destination, particularly for Canada. Prime Minister Mark Carney had signed over $1 billion in deals during a visit to Jeddah in July 2026, betting on the kingdom’s stability. However, the ongoing war between Saudi Arabia and Yemen’s Houthis has turned the region into a front line, with multiple airports and oil sites targeted since October 6, resulting in 21 deaths and over 300 injuries.
The conflict, which began after U.S. and Israeli strikes on Iran in February 2026, has led to significant economic strain on Saudi Arabia. The kingdom’s deficit reached about US$33.5 billion in the first quarter alone, and the IMF now expects its economy to shrink by 3.3% this year. The war has also disrupted Saudi Red Sea oil exports, further complicating the economic outlook.
Canada’s involvement extends beyond economic ties, as Ottawa has been supplying armoured vehicles to the Saudi military. Analysts suggest that Canada should press for enforcement of the UN arms embargo on the Houthis and urge Washington to consider the broader implications of an open-ended war in the Gulf.