In an assessment on money laundering and terrorist financing risks, Canada’s Finance Department said groups such as Babbar Khalsa International, International Sikh Youth Federation, and Sikhs for Justice “are suspected of raising funds in a number of countries, including Canada.”

The report also cited financial links between Canada and other banned outfits, including Hamas and Hezbollah, under the Politically Motivated Violent Extremism (PMVE) category.

“Several terrorist entities listed under the Criminal Code in Canada, such as Hamas, Hezbollah, and the Khalistani violent extremist groups Babbar Khalsa International and the International Sikh Youth Federation, have been observed by law enforcement and intelligence agencies to receive financial support originating from Canada,” it said.

According to the findings, extremist groups have exploited charitable funds, drug trafficking, auto theft, and the non-profit sector to channel money, with donations from expatriates fuelling operations.

The report read: "The misuse of the charitable and non-profit organisations (NPOs) sectors has been observed as a prominent financing method used by Hamas and Hezbollah. Khalistani violent extremist groups have also been known to use networks to solicit donations from diaspora communities to raise and move funds, including through NPOs.

"Despite these observations, it is estimated that revenue generation through NPO abuse represents a relatively small percentage of operational budgets of terrorist groups overall."

The once extensive Khalistani fundraising network in Canada now appears fragmented, the report noted, with “smaller pockets of individuals” sustaining the cause.

Khalistani presence in Canada has been repeatedly highlighted through videos, witness accounts, and media reports, but critics say Ottawa has failed to act.

Former Prime Minister Justin Trudeau faced accusations of being a “mute spectator” to activities targeting India, and attention now shifts to whether his successor, Mark Carney, will take corrective steps.