• Source:JND
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In a significant move, the Canadian government has acknowledged that Khalistani extremist groups are receiving financial support from within Canada. The revelation came through a comprehensive assessment on Money Laundering and terrorist financing risks in Canada released by the Department of Finance, raising fresh concerns for India-Canada relations.

According to the government report, groups like Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF), both banned under Canada’s Criminal Code, have been observed by law enforcement and intelligence agencies to be recipients of funds generated in Canada. The findings also place these outfits in the same bracket as other international terrorist organisations such as Hamas and Hezbollah, which fall under the Politically Motivated Violent Extremism (PMVE) category. The report noted that Khalistani violent extremist groups, while fragmented today, continue to sustain themselves through financial inflows originating from diaspora communities and non-profit networks. “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 assessment stated.

A Terror Financing Hub?

The report has flagged multiple channels being exploited by these groups, ranging from misuse of charitable organisations and non-profits to criminal networks, drug trafficking, crowdfunding, and cryptocurrency transactions. It highlighted that extremist groups have repeatedly capitalised on Canada’s non-profit sector to solicit donations under the guise of community welfare, only to redirect funds to support violent activities abroad.The document further added that while most non-profit organisations in Canada carry minimal risk, a “small subset” has been vulnerable to abuse for money laundering and terror financing, necessitating greater scrutiny on a case-by-case basis.

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The acknowledgment marks the first time Ottawa has explicitly admitted that Khalistani extremists have received financial backing from Canadian soil. It also echoes long-standing Indian concerns that Canada has been a “safe haven” for Khalistani elements. For years, New Delhi has raised alarms about extremist leaders openly organising rallies, issuing threats against Indian diplomats, and engaging in fundraising under charitable pretexts.The Canadian report’s inclusion of Khalistani groups alongside Hamas and Hezbollah underscores the scale of the threat. “Extremist groups are capitalising on charitable funds, drug trafficking, and auto thefts. Canada remains vulnerable as a terror financing hub,” the report said.

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Political Implications And India-Canada Relations

The timing of the report is critical, coming at a moment when New Delhi and Ottawa are cautiously trying to reset ties. Relations had plunged to their lowest point under former Prime Minister Justin Trudeau, who accused India of involvement in the killing of Khalistani terrorist Hardeep Singh Nijjar last year — an allegation India strongly rejected. With Mark Carney now at the helm in Ottawa, both sides have recently taken steps toward mending strained ties, including the appointment of new high commissioners. However, whether Carney’s government will move decisively against Khalistani extremism remains to be seen. Canada’s open admission, while significant, must be matched with strict enforcement measures if Ottawa wishes to repair credibility with New Delhi. For India, the Khalistani issue is not merely a diplomatic irritant but a direct national security threat.