In a report released in 2025, Canada’s Department of Finance has for the first time officially acknowledged that extremist Khalistani groups are actively operating within Canada and receiving financial support from sources in the country. Notable among these groups are Babbar Khalsa International (BKI) and the International Sikh Youth Federation (ISYF), both of which are listed under Canada’s Criminal Code as terrorist entities.

These groups are classified under what the report terms Politically Motivated Violent Extremism (PMVE) violent extremist organizations whose goal is political change, often involving self-determination or new political structures, rather than purely ethnic supremacy. 

According to the assessment, the funding methods are wired and varied. They include using non-profit organizations (NPOs), charities, and informal channels to socio donations from diaspora communities. The report also flags misuse of banking channels, money service businesses, cryptocurrency, and other less formal methods for transferring money.

While in earlier years these funding networks used to be large and well-organized, the recent findings suggest they are now more fragmented smaller groups or individuals aligned with the cause, rather than tightly connected organizational units.

Canada’s admission comes amid diplomatic tension with India, which has long raised concerns about Khalistani extremist parts operating from Canadian soil. The new report may steer stronger regulatory oversight, legal action, and increased cooperation between intelligence and law enforcement agencies. For many in India, this validates concerns that have been voiced for years.