Canada has officially flagged concerns over terror financing linked to Khalistan and admitted operations from its soil
OTTAWA — The Canadian government has officially flagged concerns over terror financing linked to Khalistani extremists and admitted for the first time that such groups have been operating from its soil and receiving financial support -- an issue repeatedly raised by India for years.
The admission has come through a fresh assessment by Canada's Department of Finance on money laundering and terrorist financing risks.
According to the report, several terrorist entities, including Khalistani violent extremist groups, continue to receive financial backing from within Canada for activities tied to politically motivated violence.
Canada has long been considered a base for Khalistani outfits such as Babbar Khalsa, the International Sikh Youth Federation, and Sikhs for Justice.
For the first time, Ottawa has formally acknowledged the extremist group's presence and the financial activities linked to it.
The report titled '2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada', released by its Finance Department, observed that these groups continue to attract funds for "activities linked to politically motivated violence."
It further stated that the Khalistani group is "suspected of raising funds in a number of countries, including Canada."
"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 assessment said.
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 further emphasised that Canadian law enforcement and intelligence agencies have documented financial backing for these extremist groups, including Hamas and Hezbollah, from sources within the country.
This formal acknowledgement is being seen as a major development, especially in light of India's repeated warnings that Canada has become a safe haven for anti-India elements.
Former Prime Minister Justin Trudeau faced strong criticism for his perceived inaction on the matter, which also contributed to strained relations with New Delhi.
The report also pointed out that beyond 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."
The findings mark the first time Canada has formally admitted to the scale of fundraising activities by Khalistani extremist groups on its soil, a matter that has long been a point of contention between Ottawa and New Delhi.