Canada is "currently assessing" whether the Shia Islamist Houthi movement should be added to the terrorist list in response to the Iran-backed group's attacks on commercial shipping in the Red Sea.
In a media statement, a spokesperson for Public Safety Minister Dominic LeBlanc said the country's security and intelligence agencies are considering whether the Houthis, which operate primarily in Yemen, meet the explicit criteria for inclusion on the terrorist list.
"We will have more to say in due course," the spokesperson said.
Canada has faced pressure in recent months to add another group to the list — the Islamic Revolutionary Guard Corps (IRGC), which shot down Ukraine International Airlines Flight 752 shortly after takeoff from Tehran in January 2020.
That gruesome attack left dozens of Canadian dead. The government has so far resisted those calls.
Under the Criminal Code, Prime Minister Justin Trudeau and his cabinet can add an entity to the terrorist list if the public safety minister finds there are "reasonable grounds to believe that the entity has knowingly carried out, attempted to carry out, participated in or facilitated a terrorist activity."
A decision to designate the Houthis as terrorists would have serious criminal and financial consequences.
Canadian banks can freeze the assets of a designated terror group and police can charge anyone who financially or materially supports such a group.
The U.S. has taken action already while Canada pursues its review of the Houthis.
Jake Sullivan, U.S. President Joe Biden's national security adviser, said Tuesday the Houthi rebels will be branded under American law as "global terrorists."
Sullivan said the recent Houthi attacks in the Red Sea "fit the textbook definition of terrorism" because they have put U.S. personnel in danger and jeopardize global trade operations.
Since the onset of the Israel-Hamas war, the Houthis have fired dozens of missiles at commercial tankers passing through the Red Sea, one of the world's busiest shipping lanes.
Last week, the U.S. and the U.K., with Canada's support, launched a wave of airstrikes on Houthi targets after the group's leaders ignored an ultimatum to stop their attacks.
The U.S. decision to put the Houthis back on the terrorist list after a brief interlude will have financial implications for the group and for Yemen.
The U.S. had lifted their previous terrorist designation after the United Nations and aid groups said it had exacerbated a humanitarian crisis in Yemen, which has been devastated by a civil war between a Houthi-backed group and the government.
"If the Houthis cease their attacks in the Red Sea and Gulf of Aden, the United States will immediately re-evaluate this designation," Sullivan said.
Western intelligence suggests Iran's Islamic Revolutionary Guard Corps-Quds Force and Lebanese Hezbollah provided weapons, technology, training and other assistance to the Houthis during their ten-year war with neighbouring Saudi Arabia.