Recently a report by the Canadian Finance Ministry has expressed serious concern about the financing of Khalistani terrorist groups active in Canada. 2025's * Money Laundering and Terrorist Financing Risk Evaluation * Report reveals that institutions such as Babbar Khalsa International and International Sikh Youth Federation are still getting financial assistance through charity and non-profit organizations. It is being said that these funds are being used mainly to promote political -motivated violence by targeting India.

The report classes these groups under the politically induced violent extremism (politically Motivated Violent Extremism - PMVE), which is defined as using violence to establish new political systems or criteria in the current political system. Although these groups are banned under Canada's Criminal Code, law enforcement and intelligence agencies have observed that these groups are receiving financial assistance from Canada.

Canadian intelligence agencies, including Canada Safety Intelligence Service (CSIS), have admitted that Khalistani extremist Canada is used as a basis for promoting violence in India, raising funds and making plans. The revelations have raised new demands to tighten financial rules and anti-terrorism measures in Canada to prevent the flow of money to operate extremist groups at the domestic and international level.

The disclosure has also strained diplomatic relations between Canada and India, with India expressing concerns about Canada's role in harboring anti-India elements. The situation undertakes the need for enhanced alertness and cooperation between nations to combat the financing of terrorism and ensure national and international security.