Canada flags funding of Khalistani extremist groups

This was stated in the 2025 Assessment of Money Laundering and Terrorist Funding Risks in Canada published by the Ministry of Finance and Revenue. The Canadian Government categories terrorist threats into three broad categories – ideologically motivated violent extremism or IMVE, politically motivated violent extremism or PMVE, and religiously motivated violent extremism or RMVE.

Pro-Khalistan groups are included under the PMVE category. Under that section, the report stated, “Several terrorist entities listed under the Criminal Code in Canada that fall under the PMVE category, such as Hamas, Hezbollah, and the Khalistani violent extremist groups Babbar Khalsa International and the International Sikh Youth Federation, have been observed by law enforcement and intelligence agencies to receive financial support originating from Canada.”

It said that pro-Khalistan separatists focused on “violent means” “are suspected of raising funds in a number of countries, including Canada,” the report noted. “These groups previously had an extensive fundraising network in Canada but now appear to consist of smaller pockets of individuals with allegiance to the cause but seemingly no particular affiliation to a specific group,” it added. Both the Babbar Khalsa International and the International Sikh Youth Federation are identified as terrorist entities by Canada.

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.” It pointed out that the political consequences of allowing such money laundering and terrorist financing include Canada’s “Perceived attractiveness as a jurisdiction for money laundering and terrorist financing” and “Lower confidence and trust in Canada’s private and public institutions both domestically and internationally.”

This is the latest acknowledgement by the Government of Prime Minister Mark Carney of the presence of Khalistani extremism in the country.

In July, Canada’s spy agency said that India’s alleged foreign interference activities have been driven by concerns of pro-Khalistan extremism emerging from Canada, while it also acknowledged the presence some extremists use Canada as a base for planning violence in India. These was stated in the section PMVE in the Canadian Security Intelligence Service or CSIS’ annual report to Parliament for 2024.

“Since the mid-1980s, the PMVE threat in Canada has manifested primarily through Canada-based Khalistani extremists (CBKEs) seeking to use and support violent means to create an independent nation state called Khalistan, largely within Punjab, India,” the report said.

“While there were no CBKE-related attacks in Canada in 2024, ongoing involvement in violent activities by CBKEs continues to pose a national security threat to Canada and Canadian interests. In particular, real and perceived Khalistani extremism emerging from Canada continues to drive Indian foreign interference activities in Canada,” the report noted.

“Some Canadians participate in legitimate and peaceful campaigning to support the Khalistan movement. Non-violent advocacy for an independent state of Khalistan is not considered extremism. Only a small group of individuals are considered Khalistani extremists because they continue to use Canada as a base for the promotion, fundraising or planning of violence primarily in India,” it added, in a significant official acceptance of its territory being used to potentially foment terrorism in India.