A recent report released by the government of Canada assessing the money laundering and terror financing in the country revealed that the Khalistani terrorist organisations in Canada have been receiving funding from within the country. The report titled “The 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada“, released by the country’s Department of Finance, is a comprehensive assessment of the “most pressing” money laundering and terrorist financing threats in the country.
Khalistani groups listed with Hamas and Hezbollah under the ‘Politically Motivated Violent Extremism’ category
The report places Khalistani terrorist organisations like Babbar Khalsa International and the International Sikh Youth Federation under “Politically Motivated Violent Extremism” (PMVE), along with Islamic terrorist organisations such as Hamas and Hezbollah. The PMVE has been described in the report as ideologies aiming to establish new political systems or new structures and norms within existing systems by use of violence.
According to the report, Babbar Khalsa International and the International Sikh Youth Federation received financial support originating from Canada. “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 stated.
“While PMVE may incorporate religious elements, actors are more focused on achieving political self-determination or representation, rather than promoting racial or ethnic supremacy, ” it added.
Khalistani groups intend to establish an independent state in Punjab through violent means
Divulging the motives of the Khalistani organisations in Canada, the report stated these organisations support “violent means to establish an independent state within Punjab, India “. It further adds that the funding sources of Khalistani organisations are not limited to Canada but are spread across various countries. “These groups previously had an extensive fundraising network in Canada but now appear to consist of smaller pockets of individuals with allegiance to the cause but seemingly no particular affiliation to a specific group, ” the report said.
Khalistani groups, Islamic terrorist groups like Hamas, and Hezbollah adopting the same strategy to raise funds
The government report shed light on the financial networks of these terrorist organisations. It discloses that the Khalistani organisations have been raising funding in the garb of non-profit and charitable activities. It adds that Hamas and Hezbollah also adopt a similar strategy to secure funds. Donations from diaspora communities are also said to be among the active sources of funding for the Khalistani organisations. “Khalistani violent extremist groups have also been known to use networks to solicit donations from diaspora communities to raise and move funds, including through NPOs,” the report mentioned. It claims that the revenue generated through charitable activities forms only a small percentage of the operational budget of these terrorist groups.
The inclusion of the Khalistani terrorist organisations in the government report might be seen as an indication of the Canadian government’s efforts to improve relations with India, which were strained during the previous openly pro-Khalistani Trudeau regime. However, the current Canadian PM Mark Carney belongs to the same political party as the former Canadian PM Justin Trudeau, i.e. the Liberal Party of Canada. The party has steadily supported the Sikh community in Canada, and some of its politicians, including Trudeau, have either tacitly or openly supported individuals linked to the Khalistani ideology.
India-Canada ties soured during the previous Trudeau regime
Although Canada has historically been the haven of Khalistani terrorist groups, the former Canadian Prime Minister’s blatant support of Khalistani terrorists resulted in an unprecedented downturn in India-Canada ties last year. This came as a result of Trudeau, without any evidence, openly blaming India for the killing of Khalistani terrorist Hardeep Nijjar on Canadian soil in June 2023. In October 2024, India recalled its High Commissioner Sanjay Verma from Canada, who was declared a person of interest in the Hardeep Singh Nijjar murder case by the Trudeau government, without proof. Subsequently, the Trudeau government expelled 6 Indian diplomats from Canada in the same month. This was followed by India asking six high-ranking Canadian diplomats to leave the country. The tension resulted in a freeze on trade discussions and a re-evaluation of bilateral partnerships.
Khalistani elements thrived under the previous Labour Party government led by Trudeau
Khalistani terror groups have been getting direct or indirect support from the Canadian government. The Liberal Party government led by Justin Trudeau was supported by the New Democratic Party (NDP), led by pro-Khalistani leader Jagmeet Singh. Under the former Trudeau government, incidents of attacks on Hindus by Khalistani elements increased in Canada. In November 2024, Khalistanis attacked Hindus at the Hindu Sabha Temple in Brampton, Canada after Hindu devotees protested against Khalistani elements raising anti-India slogans outside the temple to mark the anniversary of the anti-Sikh riots in Punjab, following the assassination of then-Prime Minister of India, Indira Gandhi. The Hindu community in Canada has been facing continuous threats by Khalistani terrorists and SFJ founder Gurpatwant Singh Pannun, as successive Canadian governments have turned a blind eye to the activities of Khalistani elements.
Canada’s hesitancy to act against pro-Khalistani groups under the guise of upholding freedom of speech has international consequences. India has expressed frustration over the lack of action, with Indian officials pointing out that Canada’s policies directly threaten India’s security. Canada’s recent immigration policy review, aimed at slowing the rate of incoming immigrants, has added to this complex situation, as India remains one of Canada’s largest sources of new residents.
For the first time after assuming office in March this year, Canadian Prime Minister Mark Caney met Indian Prime Minister Modi on the sidelines of the G7 Summit held in Kananaskis, Alberta, in June 2025. The meeting focused on revamping the strained ties between the two countries through future collaborations. Both leaders agreed to take constructive steps to restore stability and send their respective High Commissioners to each other’s capitals.
Glimmering hope of improved India-Canada ties
In August 2025, India and Canada announced the appointment of new high commissioners to each other’s capitals as a mark of improving bilateral ties between the two countries. India has named Dinesh K. Patnaik, a 1990-batch Indian Foreign Service officer and currently Ambassador to Spain, as its new High Commissioner to Canada. Veteran diplomat Christopher Cooter was appointed as the Canadian High Commissioner to India.
Even though with the changed Canadian regime, India-Canada relations appear to be normalising, given Canada’s long-standing backing for Khalistani elements, hopes for a drastic shift in their stance relating to the Khalistani ideology would be premature. This is evident from the fact that a couple of months after the meeting between the Indian and the Canadian Prime Ministers, Khalistani outfit Sikhs for Justice (SFJ), in collaboration with the Guru Nanak Sikh Gurdwara, opened a so-called “Embassy of Khalistan” in Surrey, Canada. The diplomatic post, bearing a sign of the fictional “Republic of Khalistan,” was set up in a building on the gurdwara premises in August 2025. Notably, the building in which the “embassy” was set up was reportedly built using taxpayer money. It was reported that the British Columbia government had allocated $150,000 for installing an elevator in the same structure.
The incident reignited the concerns of the Canadian government’s adopting a lenient approach towards Khalistani elements.
