A recent Canadian government report has acknowledged that pro-Khalistan groups are receiving funds from within Canada. The report, titled "2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada," identifies specific Khalistani extremist groups, including Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF), as recipients of these funds. These groups are listed alongside other designated terrorist entities such as Hamas and Hezbollah.
The report confirms long-held concerns about pro-Khalistani elements using Canadian soil to fuel anti-India activities. It states that these groups exploit Canada's financial system and diaspora networks to raise funds. While these groups previously had an extensive fundraising network in Canada, they now appear to operate through smaller pockets of individuals. These individuals solicit donations from the diaspora community, including through non-profit organizations. The misuse of charities and non-profit organizations is a key concern, as it provides a cover of legitimacy for raising contributions. However, the report estimates that revenue generation through non-profit abuse represents a relatively small percentage of the operational budgets of terrorist groups overall.
The Canadian government categorizes terrorist threats into three broad categories: ideologically motivated violent extremism (IMVE), politically motivated violent extremism (PMVE), and religiously motivated violent extremism (RMVE). Pro-Khalistan organizations fall under the PMVE category. PMVE is defined as "the use of violence to establish new political systems or new structures and norms within existing systems". The report highlights that these PMVE entities continue to pose significant financing risks, despite tighter compliance measures.
This assessment comes at a sensitive time in India-Canada relations. Relations between the two countries hit a low in September 2023 after then Canadian Prime Minister Justin Trudeau accused India of involvement in the killing of Khalistani terrorist Hardeep Singh Nijjar on Canadian soil. While ties have since begun to ease, concrete action against Khalistani groups in Canada remains pending.
Earlier this year, the Canadian Security Intelligence Service (CSIS) released its annual report to Parliament, which detailed how India's alleged foreign interference activities stem from concerns about "pro-Khalistan extremism emerging from Canada". The CSIS report traced the threat back to the mid-1980s, describing how "Canada-based Khalistani extremists (CBKEs)" have sought to "use and support violent means to create an independent nation state called Khalistan, largely within Punjab, India". The CSIS report made a distinction between legitimate political advocacy and extremism, stating that "some Canadians participate in legitimate and peaceful campaigning to support the Khalistan movement" and that "non-violent advocacy for an independent state of Khalistan is not considered extremism".
