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Saudi Arabia’s escalating efforts to make Canada pay for its criticisms of Saudi human rights have sent only a mild ripple through Canada’s markets and business community, as the thin economic ties between the two countries are expected to limit the damage from the diplomatic spat.

Still, a few of Canada’s most prominent companies with close Saudi business relationships – such as Irving Oil, Barrick Gold Corp. and SNC-Lavalin Group Inc. – may find themselves in the crossfire.

The Canadian dollar was briefly whipsawed by a report on Wednesday from the Financial Times that the Saudi government ordered its central bank and state pension funds to divest their Canadian stocks, bonds and cash holdings. The loonie lost more than one-third of a cent against its U.S. counterpart, before bouncing back to end the day up slightly.

The report, which cited unnamed sources, was the latest in Saudi Arabia’s retaliation for Twitter comments from Foreign Affairs Minister Chrystia Freeland and her department calling for the Saudis to release women’s-rights advocate Samar Badawi and other civil-rights activists. On Sunday, Saudi Arabia froze new trade and investment with Canada and said it is ending its education programs that have placed thousands of Saudi students in Canadian universities. On Wednesday, the Saudi Foreign Minister said his country is “considering further measures.”

But the recovery in the currency suggests that as market participants take a closer look at the Saudi actions, there is a growing realization the Canadian financial markets, trade and the economy in general have little exposure to Saudi Arabia.

Only about 0.3 per cent of Canada’s exports (dominated by military equipment) and 0.5 per cent of its imports (mostly oil) are with the Saudis. Less than 0.1 per cent of Canada’s foreign direct investment is in Saudi Arabia and the Saudis represent only 0.2 per cent of foreign direct investments in Canada, according to the latest available data from the Canadian government.

Analysts at Royal Bank of Canada said Saudi Arabia’s central bank holds only about US$10-billion in Canadian stocks, bonds and money-market securities, which represents less than 1 per cent of total foreign holdings of Canadian securities.

“We would argue that it has limited impact,” said Mark Chandler, head of Canadian fixed income and currency research at Royal Bank of Canada, who said the reaction in currency markets to the Saudi actions was “overdone.”

Indeed, the Saudis may have chosen to take a hard line on Canada precisely because there isn’t a major bilateral business relationship that its actions would threaten, suggested Helima Croft, RBC’s global head of commodity strategy.

“It’s not necessarily surprising that [Saudi Crown Prince Mohammed bin Salman] would take such tough action against a country that he probably views as … not a huge commercial partner of the kingdom,” Ms. Croft said in a conference call.

But there are some big-name Canadian companies that do have close business ties to Saudi Arabia, particularly in the oil and gas sector that dominates the Saudi economy.

Saudi Arabia is Canada’s second-biggest outside oil supplier, after the United States, making up about 20 per cent of Canada’s oil imports this year. That amounts to roughly 120,000 barrels a day of crude – which represents about 5 per cent of Canada’s daily oil consumption and less than 3 per cent of Canada’s own domestic production.

But the Saudi supplies are a much bigger deal for Irving Oil, the privately held East Coast petroleum refiner and retailer, which by itself is responsible for virtually all of Canada’s oil imports from the country. Saudi crude makes up about one-third of the oil stocks at Irving’s Saint John facility, the biggest refinery in Canada.

Joan Pinto, energy economist with Canadian Imperial Bank of Commerce, said Irving Oil “has optionality to source those barrels from elsewhere, although at this point it seems they don’t have to.” She noted the Saudis have so far said they would stop new business, while Irving has a long-standing relationship with Saudi Aramco, the kingdom’s massive state-owned oil and gas company.

Probably the Canadian company with the biggest presence in Saudi Arabia is engineering and consulting firm SNC-Lavalin, which has been providing oil and gas engineering services to Aramco for nearly a quarter-century. SNC-Lavalin’s Saudi operations accounted for nearly $1-billion in revenues, or 11 per cent of the company’s total, in 2017.

A year ago, SNC-Lavalin increased its footprint in the country, spending $59.5-million to raise its stake in Saudi Arabian Kentz Co. Ltd. to 75 per cent from 49 per cent.

Neither Irving Oil nor SNC-Lavalin responded to requests for comment on Wednesday.

Barrick Gold, which co-owns the Jabal Sayid copper mine in Saudi Arabia with state-controlled Saudi Arabian Mining Co. (Ma’aden), said on Wednesday it doesn’t expect the diplomatic dispute will affect the mining partnership.

"Over the past four years, we have developed a strong partnership with Ma’aden, working side by side at our Jabal Sayid joint venture, and we expect that partnership will continue to deepen over time,” Barrick spokesperson Andy Lloyd wrote in an e-mail to The Globe and Mail.

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