Relations between Canada and Venezuela took a sudden plunge Thursday as Ottawa appeared to reject an ultimatum issued by President Nicolas Maduro on the eve of his second inauguration.

The dispute began with a letter sent by the Lima Group of 13 nations (12 in Latin America and the Caribbean, plus Canada) declaring Maduro's election undemocratic and illegitimate, and appealing to him not to take office today.

Maduro rejected that appeal and went on television to issue an ultimatum to what he called "the Lima Cartel": retract that letter within 48 hours or his government will take "crude, urgent and energetic measures." He also claimed that Venezuela was experiencing a coup attempt backed by its foreign enemies.

He made it clear that the measures he was considering were diplomatic, leading some observers to wonder if he intends to finally break relations and expel diplomats.

And a senior official at Global Affairs Canada told CBC News the department is bracing for the possible expulsion of diplomats and breaking of ties on Friday. "We are very well prepared for any and all eventualities [Thursday]," the official said, when asked about the logistics of getting Canadian staff out of Venezuela in the event of a break.

Just under 24 hours later, Canada's Foreign Minister Chrystia Freeland shot back with some of the harshest language her government has ever used against another nation:

"Today, Nicolás Maduro's regime loses any remaining appearance of legitimacy," she said in a written statement. "Having seized power through fraudulent and anti-democratic elections held on May 20, 2018, the Maduro regime is now fully entrenched as a dictatorship. The suffering of Venezuelans will only worsen should he continue to illegitimately cling to power.

"Together with other like-minded countries in the Lima Group, Canada rejects the legitimacy of the new presidential term of Nicolás Maduro. We call on him to immediately cede power to the democratically-elected National Assembly until new elections are held, which must include the participation of all political actors and follow the release of all political prisoners in Venezuela."

Canada recognizes young opposition leader

Freeland went on to say that Canada now considers the only legitimate authority in Venezuela to be the National Assembly that was elected in 2015. That assembly currently operates without any real authority after Venezuela's Supreme Tribunal of Justice — packed with supporters of Maduro's United Venezuelan Socialist Party — stripped it of its powers.

Those powers have been transferred to a new "constituent assembly" that is appointed, rather than elected.

"Canada congratulates Juan Guaidó, who on January 5, 2019, assumed the Presidency of the National Assembly," wrote Freeland. "As the only remaining democratically-elected institution in the country, the National Assembly must continue to play a crucial role in keeping Venezuela's democracy alive. Canadians stand with the people of Venezuela and their desire to restore democracy and human rights in Venezuela."

Guaidó is a 35-year-old engineer who serves as a congressman for the opposition Popular Will Party. He was elected to head the National Assembly by the often-fractious group of opposition parties that have dominated it since 2015.

Foreign Minister Freeland spoke with Guaidó by telephone Wednesday to communicate Canada's support for him.

As head of the assembly, he is now considered Venezuela's most senior legitimate official by most countries of the hemisphere. Bolivia, Cuba, Ecuador, El Salvador, Mexico, Nicaragua and Uruguay are recognizing Maduro's second term, though their expressions of support range from enthusiastic (Cuba and El Salvador) to hesitant and muted (Ecuador, Mexico and Uruguay).

As Venezuela struggles with food shortages and hyperinflation, journalists Adrienne Arsenault and Evan Dyer describe the conditions on the ground and how Canada is responding. Minister of Foreign Affairs Chrystia Freeland has condemned the country's government, saying it is "fully entrenched as a dictatorship." 22:36

In remarks made in the capital Caracas, Guaidó said that Maduro had "stolen the symbols of power and given himself a paper crown." Flanked by other deputies, Guiadó said Maduro's inauguration showed he was backed by "only four or five countries. The whole world has come together to reject him...

"Today, Venezuela has no legitimate leader. Today, Venezuela's armed forces have no commander-in-chief."

The congressional leader also called on the country's armed forces, "those who wear the uniform with pride and haven't allowed themselves to be corrupted," to stand by their oath to defend constitutional order in Venezuela.

"The chain of command is broken," he said. "How is Maduro going to be able to appoint ambassadors, and have their credentials recognized, when other governments don't even recognize him?"

"Unanimity" against Maduro

The senior official with Global Affairs Canada said that Maduro was issuing threats from a position of weakness rather than strength. "There's unanimity in the hemisphere and elsewhere. The European Union has also spoken out very strongly.

"Maduro wouldn't be speaking publicly this way if he wasn't feeling the pressure."

The official also praised the government of Jamaica for its decision this week to nationalize the 49 per cent stake that Venezuela's state oil company holds in the island's Petrojam. The government of Jamaica, which is not part of the Lima Group, accused the Maduro government of not living up to its commitments to help modernize Jamaica's oil industry.

The Canadian official praised the boldness of the move. "There are real financial risks for them" in the hostile takeover, he said, adding it was another sign of the growing isolation of the Maduro regime.

New sanctions

The Lima Group statement that infuriated Maduro also announced a number of new measures against his regime.

Canada, Argentina, Brazil, Chile, Colombia, Costa Rica, Guatemala, Guyana, Honduras, Panama, Paraguay, Peru and Saint Lucia all agreed to declare senior Maduro regime officials persona non grata in their national territories, bar all arms transfers to Venezuela, forbid overflights by Venezuelan military aircraft and use their influence at international institutions — such as the International Monetary Fund and World Bank — to prevent Venezuela from getting loans.

Paraguay followed up on the statement by breaking diplomatic relations with Venezuela completely.

The 13 nations also warned Venezuela about an incident just before Christmas in which Venezuelan Navy patrol vessels approached and chased away a Norwegian oil-exploration vessel conducting a seismic survey in what Guyana says are its territorial waters.

A dispute over the marine boundary between Guyana and Venezuela has heated up recently following indications of major undersea oil deposits. Venezuela's own oil-dependent economy is in free-fall due to a combination of low prices, under-investment, corruption and government incompetence that has led to a steep drop in production.