Ottawa
A new report by the Canadian Department of Finance has raised serious concerns over the financial activities of Khalistani extremist organisations operating within the country. The document, titled the 2025 Assessment of Money Laundering and Terrorist Financing Risks, highlights that groups such as Babbar Khalsa International and the International Sikh Youth Federation have been receiving funding from Canadian sources.
The report places these groups under the Politically Motivated Violent Extremism (PMVE) framework, which also categorises organisations like Hamas and Hezbollah. Officials said the findings underline an ongoing risk that extremist groups are using Canada’s financial and regulatory gaps to further their activities.
Charities under scrutiny
The assessment revealed that these Khalistani groups are funnelling money through charities and nonprofit organisations. This mirrors practices used by other extremist outfits worldwide, where nonprofit entities have been exploited to mask the movement of funds.
According to the report, while the total sums raised may form a smaller portion of the groups’ finances, the pattern of abuse represents a continuing threat. The Canadian government’s monitoring system has been urged to tighten scrutiny over charitable fundraising and donations, particularly those linked to politically sensitive movements.
A recurring concern
This is not the first time Canada has been flagged in relation to Khalistani activities. In 2024, the Canadian Security Intelligence Service (CSIS) acknowledged in its public report that a small group of Khalistani extremists had used Canadian soil to promote, fundraise, and plan violent acts against India. This confirmation came after years of Indian authorities warning Ottawa of the dangers posed by such networks.
The latest finance ministry findings add weight to those earlier assessments, indicating that not only are these groups present but that they continue to exploit the nonprofit sector to sustain themselves.
Diplomatic and policy implications
The revelations come at a delicate time for India–Canada relations, which have been strained over the issue of Khalistani separatism. India has consistently raised objections to the activities of such groups, claiming they threaten its internal security and misuse the freedoms available in countries like Canada.
For Ottawa, the report is likely to trigger pressure to strengthen anti-money-laundering laws, regulate charities more closely, and build safeguards against the misuse of nonprofit organisations. Internationally, it could prompt Canada to engage in deeper cooperation with countries like India in tracking financial flows linked to extremism.
Conclusion
The report underscores that politically motivated violence remains a challenge in Canada’s domestic landscape. With Khalistani extremist groups now formally flagged under terrorist financing risks, the onus lies on Canadian authorities to address these vulnerabilities. For India, the findings serve as further validation of its long-standing concerns and could push for more robust bilateral engagement on counterterrorism and financial monitoring.