Khalistani extremist groups Babbar Khalsa International and the International Sikh Youth Federation have been flagged as beneficiaries of financial support originating within Canada, a new government report has revealed.
The findings, published in the ‘2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada’, highlight concerns about extremist fundraising networks operating inside the country, often under the guise of non-profit and charitable activities.
The report said several organisations categorised as Politically Motivated Violent Extremism (PMVE) groups – including Hamas, Hezbollah, and the Khalistani factions – have been observed by Canadian intelligence and law enforcement agencies to have received funds raised locally.
“Politically Motivated Violent Extremism (PMVE) encourages the use of violence to establish new political systems, or new structures and norms within existing systems,” the report stated. “While PMVE may include religious elements, actors are more focused on political self-determination or representation, rather than racial or ethnic supremacy.”
It further noted that Hamas and Hezbollah remain well-resourced entities within this category, using a variety of methods to sustain their activities. “These groups use diverse funding methods to sustain their operations, including the abuse of the money services businesses (MSB) and banking sectors; use of cryptocurrencies; state financing; abuse of the charitable and non-profit organisations (NPO) sector; and criminal activity,” the assessment said.
Khalistani extremist groups, the report cautioned, are suspected of raising money in several countries, including Canada, to further their separatist agenda. “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,” the document revealed.
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A particular concern identified in the assessment was the misuse of charities and non-profits. “The misuse of the charitable and NPO sectors has been observed as a prominent financing method used by 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,” it said.
The assessment nevertheless underlined that such fundraising accounts for only a small share of the overall budgets of terrorist organisations. By contrast, large-scale illegal activities such as drug trafficking, fraud, commercial trade fraud, trade-based money laundering and tax crimes generate illicit proceeds running into billions of dollars annually in Canada.
The development follows a June report by the Canadian Security Intelligence Service, which underlined that violent activities by Khalistani extremists based in Canada have posed a consistent national security threat for decades. “Since the mid-1980s, the PMVE threat in Canada has manifested primarily through Canada-based Khalistani extremists seeking to use and support violent means to create an independent nation state called Khalistan, largely within Punjab, India,” the CSIS said in its 2024 assessment.
The twin reports appear to reinforce New Delhi’s long-standing position that pro-Khalistani elements operating in Canada have been carrying out anti-India activities unchecked.
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