Canada Identifies Terror Financing for Khalistani Groups

A fresh spotlight has been cast on Khalistani extremist groups in Canada, after a newly released government assessment confirmed that at least two such organizations continue to receive financial support originating from Canadian soil.

The report, titled “2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada,” identifies Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF) as beneficiaries of funds raised within Canada. Both groups are listed terrorist entities under the Canadian Criminal Code and have long been accused of promoting violence to establish an independent Khalistan in India’s Punjab region.

PMVE Threat Growing in Canada

The latest report categorizes these groups under Politically Motivated Violent Extremism (PMVE) — a form of extremism that, while sometimes rooted in religious identity, is primarily driven by political goals such as self-determination. According to the document, PMVE groups “encourage the use of violence to establish new political systems or structures within existing ones.”

The report also underscores that Canada-based Khalistani networks, while smaller today than during their peak in the 1980s and 1990s, remain active through isolated pockets of supporters. These groups exploit various methods to sustain their activities, including the misuse of charities, money services businesses, cryptocurrencies, and international diaspora donations.

Misuse of Charities and Diaspora Networks

A key concern raised in the report is the abuse of non-profit and charitable organizations to move funds under the guise of community service or religious activity. This method has also been linked to groups like Hamas and Hezbollah. In the case of Khalistani extremists, fundraising within Sikh diaspora communities remains an important avenue to channel resources, even though the scale is relatively smaller compared to globally entrenched outfits.

The findings reaffirm long-standing Indian concerns that Canada has served as a safe haven for individuals and organizations espousing pro-Khalistan ideology. New Delhi has repeatedly urged Ottawa to take stronger action against such elements, accusing them of orchestrating anti-India activities with impunity.

Canada: Parallel Threats: Drugs, Fraud, and Trade Crimes

Beyond extremist financing, the report stresses that illegal drug trafficking remains Canada’s most significant money laundering threat, generating billions of dollars in illicit proceeds annually. Other major risks include fraud, commercial trade fraud, trade-based money laundering, and tax crimes.

National Security Concerns Intensify

The revelations come just two months after the Canadian Security Intelligence Service (CSIS) issued its 2024 report warning that Khalistani extremist groups in Canada continue to pose a national security threat. CSIS noted that since the mid-1980s, Canada-based supporters of Khalistan have sought to use violent means to further their separatist agenda, marking them as a persistent domestic concern.

While the government report clarifies that extremist fundraising represents only a fraction of the overall financing threats in Canada, its emphasis on Khalistani networks is likely to deepen the ongoing diplomatic friction with India.

Also Read : Indian Professionals in the American Workforce Under Fire