A Canadian Department of Finance report released today confirms that Khalistani extremist groups, including Babbar Khalsa International and the International Sikh Youth Federation, are receiving financial support from within Canada, intensifying diplomatic friction with India.

The "2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada" details how these banned terrorist entities exploit diaspora networks, charities, and non-profits to fund "politically motivated violent extremism" (PMVE), a threat validated by Canadian law enforcement and intelligence agencies.

This funding supports efforts to establish an independent Sikh state in Punjab, India.

The revelation reignites tensions following the 2023 killing of Khalistani leader Hardeep Singh Nijjar in Vancouver, where Canada alleged Indian involvement, leading to diplomat expulsions.

Babbar Khalsa’s history includes the 1985 Air India Flight 182 bombing, killing 329—mostly Canadians of Indian origin—convicting Inderjit Singh Reyat in 2003, highlighting the group’s long-standing threat.

India has long pressed Canada to curb Khalistani activities, a demand now supported by Ottawa’s findings.