Khalistani groups receiving financial backing from within Canada: Report

A Canadian government report says Khalistani groups, including Babbar Khalsa International and ISYF, are receiving financial support through networks operating in Canada

Canadian report flags funding for Khalistani groups 

A Canadian government report has identified at least two Khalistani extremist organisations as recipients of financial support originating from Canada.

 

The report, titled 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada, names Babbar Khalsa International and the International Sikh Youth Federation (ISYF) among the groups.

 

The findings come two months after Canada’s intelligence agency warned of threats posed by politically motivated violent extremism (PMVE) within the country. Since the mid-1980s, Canada-based Khalistani separatists have been accused of backing violent means to push for an independent state carved out of India’s Punjab. 

 

Politically motivated violent extremism

The report defines PMVE as encouraging violence to reshape political systems or pursue self-determination goals. While such movements may contain religious aspects, they are primarily political in nature.

 

It noted that groups such as Hamas, Hezbollah and the two Khalistani outfits have benefited from Canada-linked financing. The findings also echo the Canadian Security Intelligence Service’s 2024 assessment, which said Khalistani extremists remain a persistent national security concern for Canada and its interests abroad.

Methods of raising funds

The report detailed the methods used by extremist groups to generate and channel resources, including:

• Exploiting money services businesses and banking networks
• Using cryptocurrencies
• Leveraging state-backed financing
• Misusing non-profit and charitable organisations
• Resorting to fraud and drug trafficking

 

Khalistani groups in particular were flagged for raising money through diaspora networks and soliciting donations via non-profit channels. While the scale of funds was smaller compared with Hamas and Hezbollah, the misuse of charities was highlighted as a consistent concern. 

Wider financial crime risks in Canada

Beyond terror financing, the report said illegal drug trafficking remains the most significant money laundering threat in Canada, generating billions annually. Other major risks include fraud, commercial trade fraud, trade-based money laundering and tax crimes.

 

The release of the report is likely to fuel debate on Canada’s handling of extremist elements within its borders. For India, which has repeatedly accused Canada of turning a blind eye to pro-Khalistani activities, the findings reinforce its long-standing concerns.