Canadian report flags financial support to Khalistani extremist groups

A 2025 Canadian government report reveals that Babbar Khalsa International and the International Sikh Youth Federation are receiving financial support originating from Canada. The assessment highlights diaspora-linked funding and abuse of charitable channels by Khalistani extremists pursuing violent means for an independent Punjab.

Ottawa: At least two Khalistani extremist groups have received financial support originating from Canada, according to a new Canadian government report on terror financing.

The report titled ‘2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada’ has identified the Khalistani extremist groups receiving financial support originating from Canada as Babbar Khalsa International and the International Sikh Youth Federation.

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The development comes two months after a report by Ottawa’s intelligence agency said a politically motivated violent extremism threat in Canada since the mid-1980s has manifested through Khalistani extremists seeking to use violent means to create an independent nation state called Khalistan within India’s Punjab.

The latest report said the ‘Politically Motivated Violent Extremism (PMVE) encourages “the use of violence to establish new political systems, or new structures and norms within existing systems.” “While PMVE may include religious elements, actors are more focused on political self-determination or representation, rather than racial or ethnic supremacy,” it said.

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 pointed out.

In 2022, the Financial Transactions and Reports Analysis Centre of Canada’s (FINTRAC) Operational Alert on Terrorist Activity Financing had identified Hezbollah as the second most frequently identified international terrorist entity to receive outgoing Canadian funds.

The 2025 Assessment report detailed the PMVE financing methods too and said Hamas and Hezbollah are established and well-resourced groups that fall under the PMVE category.

“These groups use diverse funding methods to sustain their operations, including the abuse of the money services businesses (MSB) and banking sectors; use of cryptocurrencies; state financing; abuse of the charitable and non-profit organisations (NPO) sector; and criminal activity.