Justin Trudeau has said there is “credible evidence” India is responsible for the alleged assassination of Hardeep Singh Nijjar, a prominent Canadian Sikh leader.

The allegations from Canada’s prime minister is likely to further strain relations between the two nations. On Monday, Trudeau told the House of Commons of Canada that, in recent weeks, national security authorities had been probing allegations that New Delhi was behind a state-sponsored assassination.

He said he raised the issue “in no uncertain terms” with the Indian prime minister, Narendra Modi, when the two met briefly in New Delhi last week for the G20 summit.

“Any involvement of a foreign government in the killing of a Canadian citizen on Canadian soil is an unacceptable violation of our sovereignty,” he said. “Canada is a rule of law country, the protection of our citizens in defence of our sovereignty are fundamental.

“Our top priorities have therefore been one, that our law enforcement and security agencies ensure the continued safety of all Canadians. And two, that all steps be taken to hold perpetrators of this murder to account.”

Trudeau said the alleged killing “is contrary to the fundamental rules by which free, open, and democratic societies conduct themselves”.

The New Democratic party leader, Jagmeet Singh, who is Sikh, said there must be consequences for the assassination. “To hear the prime minister of Canada corroborate a potential link between a murder of a Canadian citizen on Canadian soil by a foreign government is something I could never have imagined,” he said.

“We will ensure that no rock is unturned, that every possible link is examined.”

The Conservative leader, Pierre Poilievre, said the allegations, if true, “represent an outrageous affront to Canada”, adding that citizens should be free from extrajudicial killings.

He added: “Canadians deserve to be protected on Canadian soil. We call on the Indian government to act with utmost transparency as authorities investigate this murder, because the truth must come out.”

In June, Nijjar was shot and killed in front of the Guru Nanak Sikh Gurdwara in Surrey, British Columbia. He was a strong advocate of the Khalistan movement, which seeks an independent homeland for Sikhs in India’s Punjab region.

New Delhi had previously alleged Nijjar was part of a plan to murder a Hindu priest in Punjab, offering a bounty of nearly $12,000 (£9,688). The fatal shooting of Nijjar led many to accuse India of playing a role in the killing.

“Today, the prime minister of Canada has publicly said what Sikhs in Canada have known for decades – India actively targets Sikhs in Canada,” said the World Sikh Organisation.

The foreign affairs minister, Mélanie Joly, said Canada had expelled a “key Indian diplomat” and “expects India to fully collaborate with us and ultimately to get to the bottom of this”.

The diplomat is the head of the Research and Analysis Wing (Raw), India’s foreign intelligence agency in Canada. “We’ll hold the perpetrators accountable and bring them to justice,” said the public safety minister, Dominic LeBlanc, adding the RCMP was leading the murder investigation.

The Indian high commission in Ottawa did not immediately respond to a request for comment.

The announcement comes a week after Trudeau was in New Delhi for the G20, where there were signs of tensions with Modi. After the meeting, Modi’s office said the Indian leader had “strong concerns about continuing anti-Indian activists of extremist elements in Canada”.

India and Canada have been negotiating a trade agreement, but talks have been paused.