Canada Acknowledges Khalistani Terror Groups Active, Fundraising on Its Soil

Canada Admits Khalistani Groups Active, Receiving Funds in New Risk Report.

In a move validating India’s longstanding concerns, Canada’s Department of Finance has, for the first time, officially acknowledged that Khalistani extremist groups are operating on its soil and receiving financial support.

The 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada identifies Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF) as terrorist organisations under the Criminal Code, noting that they have been observed by law enforcement to receive funds originating in Canada.

The report categorises Khalistani outfits under “politically motivated violent extremism” alongside Hamas and Hezbollah, and states that these groups employ a range of fundraising methods — from diaspora donations and abuse of non-profit organisations to the use of cryptocurrencies, money service businesses, and criminal activity.

While acknowledging that large-scale networks have diminished, the report warns that smaller pockets of supporters remain active, continuing to channel funds toward extremist causes.

India has long accused Canada of ignoring Khalistani groups that seek to carve out a separate state of Khalistan in Punjab. The issue has strained ties between New Delhi and Ottawa, especially after former Canadian Prime Minister Justin Trudeau accused India in 2023 of involvement in the killing of Khalistani terrorist Hardeep Singh Nijjar — a claim India strongly rejected.

Relations showed signs of recovery after Prime Minister Mark Carney took office, promising to address India’s concerns and reinstating envoys in both countries. However, New Delhi continues to press for decisive action against Khalistani extremists in Canada.