Canada’s Department of Finance has acknowledged in its 2025 Assessment of Money Laundering and Terrorist Financing Risks that extremist organizations, including Khalistani groups, have received financial support from within the country. The report identifies Babbar Khalsa International and the International Sikh Youth Federation (ISYF) among the groups benefiting from such backing, which is linked to politically motivated violent extremism.
The report categorizes these groups under “Politically Motivated Violent Extremism” (PMVE), a term used to describe the use of violence to establish new political systems or alter existing ones. It also places organizations such as Hamas and Hezbollah in the same category, noting that they are well-funded and utilize multiple channels of financing. These include cryptocurrencies, banks, state sponsorship, and the misuse of charities and non-profit bodies.
This admission follows earlier confirmations by Canadian intelligence agencies that Khalistani extremists are active within Canada, using the country as a base to raise funds, plan, and promote violence directed primarily at India. Officials have clarified that only a small section of the community is involved, but the threat remains significant.
The findings have drawn renewed attention to the challenges in India–Canada relations, which have often been strained due to Sikh separatist activities. Recent diplomatic disputes have further highlighted the political sensitivity of the issue.
Experts argue that the report underscores the urgent need for Canada to strengthen financial regulations and enhance counter-extremism measures. By closing loopholes that allow extremist groups to exploit domestic systems for international agendas, Canada faces increasing pressure to act decisively. The revelations are likely to spark further debate on how the government balances internal freedoms with the need to curb the funding of violent movements abroad.
