Saudi Arabia's media ministry is investigating the incident, which came as tensions between the two countries escalated.
Riyadh also suspended all new trade agreements with Canada, recalled its own ambassador and gave Canada 24 hours to leave the country.
"We are deeply concerned that Saudi Arabia has expelled Canada's ambassador in response to Canadian statements in defence of human rights activists detained in the kingdom", said Freeland in a statement.
The United States said Tuesday that both Canada and Saudi Arabia are "close partners" of the USA, and asked the Saudi government for more information of the detention of several activists. "But I would not deliver Canadian grains to Saudi Arabia now, even on previous contracts", the trader added.
In response, Canada has refused to back down.
But Qatar, which has been locked in a diplomatic rift with Saudi Arabia and other neighbors for over a year, said on its foreign ministry's official Twitter account that the GCC secretary general's statement did not represent its view of the situation.
Among the arrested is Samar Badawi, an award-winning women's-rights activist who sought to abolish the country's male-guardianship laws.
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Saudi Arabia's Foreign Minister Adel Al Jubeir countered shortly after in an Arabic tweet saying the "surprising Canadian position is based on inaccurate information, the arrests are subject to our judicial systems that guarantee their rights".
In April, Canadian Prime Minister Justin Trudeau expressed his "serious concern" over the continued jailing of Samar Badawi's brother, the blogger Raif Badawi, to Saudi King Salman.
Prince Mohammed, heir to the region's most powerful throne, has introduced a string of reforms such as lifting a decades-long ban on women drivers in a bid to overhaul the kingdom's austere image.
The news dominated the global headlines and social media, especially in Saudi Arabia, where Saudis launched an Arabic hashtag "السعوديه_تطرد_السفير_الكندي" that literally translates to: "Saudi Arabia expels Canadian ambassador".
Badawi's wife Ensaf Haidar has been granted asylum by Canada, where she is raising their three children.
But Riyadh's singling out of Canada is aimed at strongly discouraging other critical Western governments from speaking out, observers say.
Media captionSaudi Arabia's permanent representative to the United Nations confirmed the change in policy What has the relationship between Saudi Arabia and Canada been like in the past?