Saudi Arabia restored diplomatic relations with Canada on Wednesday, the country's foreign ministry said in a statement, ending a five-year rift over Riyadh's jailing of activists that damaged trade and relations with both countries.

The decision follows discussions between Saudi Crown Prince Mohammed bin Salman and Canada's Prime Minister Justin Trudeau last November on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Forum in Bangkok, the statement added.

"It has been decided to restore the level of diplomatic relations with Saudi Arabia to its previous level," Canada foreign ministry said in a statement, which also announced the restoration of relations.

Both countries also announced Canada's new ambassador in Saudi Arabia as being Jean-Philippe Linteau, and expressed their desire to restore diplomatic relations on the basis of mutual respect and common interests.

Canada's relations with Saudi Arabia nosedived in 2018 after officials in Ottawa accused the kingdom of human rights violations and demanded the release of imprisoned activists.

Saudi Arabia responded by freezing new trade and investment deals, suspending flights to Canada, reassigning students studying there and expelling Canada's ambassador to Saudi Arabia, while recalling its own. The response at the time had struck some observers as a disproportionate overreaction to a relatively routine criticism of the country's human rights record.

Saudi Arabia has lately been prioritizing economic growth at home, which requires regional stability to succeed. The $1 trillion economy has been on a quest to move away from its traditional reputation as a conservative, combative oil producer, and towards a global economic player and key regional tourism and business hub.