Canada has, for the first time, officially acknowledged that Khalistani terror groups have been raising funds and operating from its soil, a revelation that validates long-standing Indian concerns about Ottawa turning a blind eye to extremist activities.

The admission comes in a recent assessment on money laundering and terrorist financing risks released by Canada’s Department of Finance, which categorically points to the role of outfits like the Babbar Khalsa International (BKI), the International Sikh Youth Federation (ISYF), and Sikhs for Justice (SFJ) in mobilising resources from Canadian territory.

The report notes that these groups, long designated as terrorist organisations under Canadian and international law, have benefitted from local sympathisers, expatriate donations, and the misuse of Canada’s loosely regulated charitable and non-profit sectors to sustain anti-India agendas.

Significantly, the study places Khalistani groups in the same category of Politically Motivated Violent Extremism (PMVE) as globally recognised terror organisations such as Hamas and Hezbollah, underlining that financial flows linked to terrorism continue to emanate from Canada despite Ottawa’s counterterrorism frameworks.

The report highlights that Canadian law enforcement and intelligence agencies have repeatedly observed financial support being funnelled from Canadian individuals and entities to these violent extremist groups.

Earlier, these organisations had an extensive and structured fundraising network in the country, but following public exposure and proscription, operations appear to have shifted to smaller decentralized clusters of individuals who maintain allegiance to the Khalistani cause.

Such groups have adapted by diversifying their fundraising techniques—ranging from conventional donations and event-based collection drives to more sophisticated methods, including crowdfunding campaigns, cryptocurrency transfers, drug trafficking, and even auto theft syndicates.

The misuse of Money Services Businesses (MSBs) and the banking sector has added to the complexity of tracking these financial flows, while the report also raises alarm about possible linkages to state-sponsored financing.

Another critical element flagged in the report is the persistent exploitation of Canada’s charitable status framework. Non-profit organisations and charitable trusts, often set up under the guise of cultural, religious, or humanitarian objectives, have served as conduits for the redirection of funds to extremist causes.

The assessment warns that Khalistani-linked individuals and entities are adept at leveraging Canada’s liberal tax and regulatory environment to siphon off resources. Moreover, the report indicates that the extremist networks are not limited solely to raising and disbursing cash—illicit markets in narcotics and stolen vehicles are also being utilised, enabling these groups to diversify their revenue streams and evade conventional counter-financing scrutiny.

While India has consistently raised the issue of Canada’s permissive stance towards Khalistani activists, Ottawa has, until now, refrained from any direct admission. For years, Canadian authorities have faced criticism from New Delhi for allowing anti-India propaganda, intimidation, and fundraising rallies to proceed unchecked.

Animated videos praising dead terrorists, rallies glorifying the 1984 assassins of Prime Minister Indira Gandhi, and financial support for campaigns like the so-called Khalistan referendum have all been documented. Despite mounting evidence, successive Canadian politicians, particularly former prime minister Justin Trudeau, have been accused of appeasing certain diaspora constituencies at the cost of Canada’s credibility on counterterrorism commitments.

Trudeau’s critics at home and abroad argue that his administration, driven by domestic electoral calculations, allowed extremist narratives to thrive, effectively giving oxygen to movements that have sought violence and separatism against India.

The admission has triggered renewed debate on whether Prime Minister Mark Carney, Trudeau’s successor, intends to recalibrate Canada’s policy and confront the issue decisively. Carney, who inherits strained India–Canada relations following the diplomatic fallout over the 2023 Hardeep Singh Nijjar controversy, now faces international pressure to match rhetoric with enforcement.

The Finance Department’s report has placed Ottawa on record as acknowledging a problem it long downplayed, thereby opening opportunities for enhanced cooperation with India on dismantling terror-financing circuits.

For New Delhi, this admission provides a reference point in demanding accountability and pushing for concrete steps ranging from stricter enforcement of terrorist financing laws to scrutiny of diaspora-linked charities.

Strategically, Canada now risks reputational damage if it fails to act on its own findings. Declaring that its soil has been exploited to fund groups on par with Hezbollah and Hamas underscores systemic vulnerabilities in its counter-terror financing apparatus.

The urgent task for Ottawa is to address loopholes in regulatory oversight, police illicit funding networks, and ensure that fundraising operations under the cover of ethnic or religious platforms are brought under closer supervision.

Unless corrective measures are taken, critics warn that Canada may continue to serve as a hub for extremist financing with global spillover effects. India's position is expected to harden further, with policymakers likely to demand not just verbal acknowledgment but arrests, asset freezes, and dismantling of these networks.

All eyes are now on how Carney balances domestic political pressures with the need to restore credibility abroad, particularly in relations with India, which has doubtless taken note of Canada’s long overdue acknowledgment.

Based On NDTV Report