The Canadian government has, for the first time, officially recognized that Khalistani militant organizations are based within its territory and are being financially supported—a fact India has repeatedly raised alarm over for years.
The acknowledgment is part of a recently published review by Canada's Department of Finance that analyzes the nation's vulnerability to money laundering and terror financing.
The report points out that some terrorist groups, such as Khalistani violent extremist groups, still get financial support within Canada to sustain activities associated with politically motivated violence.
For years, groups like Babbar Khalsa, the International Sikh Youth Federation, and Sikhs for Justice have been operating from Canadian territory. And now, Ottawa has officially acknowledged both their operations and the related fundraising efforts.
The report, entitled "2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada", observes that these groups continue to draw funds for "activities associated with politically motivated violence." It goes on to say that the Khalistani network is "suspected of raising funds in various countries, including Canada."
As stated in the paper, although these groups previously had extensive fundraising networks, their existing organization seems to comprise "smaller pockets of people with loyalty to the cause but apparently no specific affiliation to a particular group."
It also underlined that "several terrorist entities listed under the Criminal Code in Canada that fall under the Politically Motivated Violent Extremism (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."
The report emphasizes that Canadian intelligence and security agencies have followed funding streams for extremist groups, such as Hamas and Hezbollah, with donations coming from within Canada.
This clear concession is being viewed as a major move, particularly given that New Delhi has long charged Ottawa with enabling its soil to be used as a refuge for anti-India elements.
The previous Prime Minister Justin Trudeau himself was constantly criticized for inaction on the matter, which further degraded Canada's relationship with India.
The report also points out that, apart from Hamas and Hezbollah, "Khalistani violent extremist groups have also been known to use networks to solicit donations from diaspora communities to raise and move funds, including through NPOs."
This is the first time Canada officially acknowledged the level of fundraising conducted by Khalistani extremists in its territory—an acknowledgment that speaks directly to one of the long-standing sources of contention between Ottawa and New Delhi.
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