'Politically motivated violence': Khalistani groups receive funds from Canada; report raises red flags

Several terrorist groups, including Khalistani extremist organisations, are still getting financial support from Canada to fund politically motivated violence, according to a new report by the Canadian Department of Finance.

The 2025 Assessment of Money Laundering and Terrorist Financing Risks lists groups like Babbar Khalsa International and the International Sikh Youth Federation under the category of Politically Motivated Violent Extremism (PMVE).


The report says these groups misuse funding networks, including charities and non-profits, to support their activities.

PMVE is defined in the report as "the use of violence to establish new political systems or new structures and norms within existing systems."

These Khalistani groups are already banned under Canada’s Criminal Code, which also lists Hamas and Hezbollah.

The report states: "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."

Canada’s financial intelligence agency FINTRAC had earlier warned, in 2022, that Hezbollah was the second most common international terrorist group to get funds from Canada.

The new report explains how these groups raise money. While Hamas and Hezbollah are described as "well-resourced" and known to use banks, cryptocurrencies, state sponsorship, and charities, Khalistani extremists are suspected of raising funds in similar ways, especially by asking for donations from diaspora communities.

The report adds: "The misuse of the charitable and NPO sectors has been observed as a prominent financing method used by Hamas and Hezbollah. 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. Despite these observations, it is estimated that revenue generation through NPO abuse represents a relatively small percentage of operational budgets of terrorist groups overall."

Earlier this year, Canada’s top intelligence agency, the Canadian Security Intelligence Service (CSIS), also admitted that Khalistani extremists are using Canadian soil to promote, fundraise, and plan violence in India. Its annual report in June clearly stated: "Khalistani extremists continue to use Canada as a base for the promotion, fundraising or planning of violence primarily in India."

India has been raising concerns about this issue for years, saying Canada has become a safe haven for anti-India elements. The CSIS report has now confirmed those concerns.

The report also noted that since the mid-1980s, the Khalistani extremist threat in Canada has mostly come from Canada-based Khalistani extremists (CBKEs) who want to create a separate state called Khalistan in Punjab, India.

The findings have reignited debate about extremist activity in Canada and its impact on relations with India. The report called for strong monitoring of both foreign influence and domestic extremist financing networks.