In a significant development, a new report from Canada’s Department of Finance has acknowledged that Khalistani supporters and groups are operating in the country and also receiving financial assistance.
According to the report, several extremist groups including Khalistanis continue to receive financial support originating from Canada for activities linked to politically motivated violence in the country.
The 2025 Assessment of Money Laundering and Terrorist Financing Risks places certain Khalistani groups, including Babbar Khalsa International and the International Sikh Youth Federation, under the category of Politically Motivated Violent Extremism (PMVE) and suspects them of exploiting funding networks, including those in the non-profit and charitable sectors, to support their objectives.
The assessment defines PMVE as “the use of violence to establish new political systems or new structures and norms within existing systems.”
These groups are placed under terrorist entities groups under the Canadian Criminal Code, which also includes Hamas and Hezbollah.
Several terrorist entities listed under the Criminal Code in Canada that fall under the 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 read.
“These groups use diverse funding methods to sustain their operations, including the abuse of the MSB and banking sectors; use of cryptocurrencies; state financing; abuse of the charitable and NPO sector; and criminal activity,” the report said.
The report noted that Khalistani groups have traditionally sought donations from diaspora communities and generated funds through non-profit organisations, though this accounts for only a minor share of their total operational budgets.