The Canadian government has corroborated India’s allegations concerning the financial support of Khalistani terrorist-linked organizations, including those operating within Canada. A recent assessment of money laundering and terrorist financing risks within Canada, released by the Canadian government, specifically identifies at least two Khalistani extremist groups as recipients of domestic financial aid. The groups named in the report, titled “2025 Assessment of Money Laundering and Terrorist Financing Risk in Canada,” are Babbar Khalsa International and the International Sikh Youth Federation.
A prior report from Ottawa’s intelligence agencies highlighted the emergence of politically motivated violent extremism in Canada, stemming from the efforts of Khalistani extremists to establish an independent Khalistan in India’s Punjab through violent means.
Following the initial report, the new Canadian government assessment reveals that politically motivated violent extremism encourages the use of violence to establish new political systems or structures, or to alter existing ones. The report further states that while religious elements may be present, the primary focus of this extremism lies in political self-determination and representation, rather than racial or ethnic dominance.
Among the terrorist entities listed under Canada’s Criminal Code and engaged in politically motivated violent extremism are Hamas, Hezbollah, and the Khalistani extremist groups Babbar Khalsa International and International Sikh Youth Federation, all of whom are receiving financial support from within Canada, according to the report.
A 2022 report from the Financial Transactions and Report Analysis Centre of Canada singled out Hezbollah as the second most frequently cited international terrorist organization receiving funds from Canada. The 2025 report provides an in-depth analysis of the methods employed to finance politically motivated violent extremism, highlighting the well-established and well-resourced nature of Hamas and Hezbollah.
The report further details the diverse methods these groups utilize to sustain their operations, including exploiting banking systems, leveraging cryptocurrencies, accessing government funding, abusing charitable and non-profit organizations, and engaging in criminal activities.
The report notes that Khalistani extremist groups, seeking to establish a separate state in India’s Punjab through violent means, are suspected of fundraising within Canada and elsewhere. While these groups previously maintained a fundraising network in Canada, the current landscape appears to involve smaller, independent groups of individuals committed to the cause, but without direct ties to any specific organization.
Furthermore, the misuse of non-profit and charitable organizations represents a significant concern for the organizations highlighted in the report. The report’s findings appear to substantiate New Delhi’s claims that pro-Khalistan elements in Canada are freely undertaking anti-India activities.