Toronto: Canada has officially acknowledged that Khalistani violent extremist groups receive financial support from within its borders, according to a government risk assessment report released by the finance ministry.
The admission comes in the “2025 Assessment of Money Laundering and Terrorist Funding Risks in Canada,” published by the ministry of finance and revenue, which states that such groups “have been observed by law enforcement and intelligence agencies to receive financial support originating from Canada.”
The Canadian government categorises terrorist threats into three broad categories: ideologically motivated violent extremism (IMVE), politically motivated violent extremism (PMVE), and religiously motivated violent extremism (RMVE). Pro-Khalistan organisations fall under the PMVE category, alongside other designated terrorist entities including Hamas and Hezbollah.
Two specific Khalistani groups — Babbar Khalsa International and the International Sikh Youth Federation — are explicitly listed as terrorist entities under Canada’s Criminal Code and identified in the report as receiving financial support from Canadian sources.
According to the assessment, these separatist groups “are suspected of raising funds in a number of countries, including Canada.” The report notes that while they previously maintained “an extensive fundraising network in Canada,” they now “appear to consist of smaller pockets of individuals with allegiance to the cause but seemingly no particular affiliation to a specific group.”
The report stressed that given the “grave consequences of terrorist activity both in Canada and abroad,” the country “must remain vigilant to protect its national security from terrorists and violent extremists, including their financing.”
{{/usCountry}}The report stressed that given the “grave consequences of terrorist activity both in Canada and abroad,” the country “must remain vigilant to protect its national security from terrorists and violent extremists, including their financing.”
{{/usCountry}}The finance ministry warned that allowing such terrorist financing carries significant political consequences, including Canada being perceived as an “attractive jurisdiction for money laundering and terrorist financing” and resulting in “lower confidence and trust in Canada’s private and public institutions both domestically and internationally.”
This represents the latest acknowledgement by PM Mark Carney’s government of Khalistani extremism’s presence. In July, the Canadian Security Intelligence Service (CSIS) released its annual report to Parliament, which detailed how India’s alleged foreign interference activities stem from concerns about “pro-Khalistan extremism emerging from Canada.”
The CSIS report traced the threat back to the mid-1980s, describing how “Canada-based Khalistani extremists (CBKEs)” have sought to “use and support violent means to create an independent nation state called Khalistan, largely within Punjab, India.”
Whilst no CBKE-related attacks occurred in Canada during 2024, the intelligence service emphasised that “ongoing involvement in violent activities by CBKEs continues to pose a national security threat to Canada and Canadian interests.”
The CSIS report made a crucial distinction between legitimate political advocacy and extremism, stating that “some Canadians participate in legitimate and peaceful campaigning to support the Khalistan movement” and that “non-violent advocacy for an independent state of Khalistan is not considered extremism”.