Islamic banking and finance in Canada

The demand for Islamic banking and finance has grown in Canada due to the growing Muslim population ^[1] in the country who want to avoid riba and other financial practices in violation of sharia. These sharia-compliant financial products are not offered by main financial institutions and, thus, small financial companies are major players. However, major companies like WealthSimple are starting to embrace the idea. ^[2]

Islamic Mortgage

History

A Toronto-based financial company UM Financial started giving Sharia-compliant loans to Muslims in 2005 in partnership with Central 1 Credit Union of Vancouver. The company planned to offer no-interest MasterCard as well. ^[3] UM financial was ordered to go into receivership by the Ontario Superior Court on October 7, 2011. ^[4] Omar Kalair and Yusuf Panchbaya of UM Financial were charged by RCMP for $4.3-million mortgage fraud, but both men were acquitted of all counts contained in the indictment in Ontario Superior Court June 7, 2019. ^[5]

Islamic Mortgage in the main stream

The 2024 federal budget announced on April 16 included plans to bring halal mortgages into financial regulatory system. ^[6]

Islamic financial products

Mortgage products

Comparison of Islamic Mortgage Products

Company	Islamic model	Year of Inception	Funder	Funding from Banks/ Credit Unions	Serving province	Sharia Standards	Sharia Certification	External Review	Website
IjaraCDC Canada	Ijarah-wa-Iqtina	2008		Yes				AMJA [7] Ebrahim Desai [8]
Aya Financial	Diminishing Musharakah			Yes	Ontario			Ebrahim Desai [9]
Zero Mortgage	Diminishing Musharakah			Yes				Ebrahim Desai [10]
Manzil	Murabaha	2019	Manzil Mortgage Fund	No	Ontario	AAOIFI (disputed [11] )		Ebrahim Desai [12]
Manzil	DiminishingMusharakah	2019	Manzil Mortgage Fund	No		AAOIFI		Ebrahim Desai [13]
Eqraz	Murabaha	2022			Alberta British Columbia Manitoba New Brunswick Newfoundland and Labrador Nova Scotia Ontario Prince Edward Island Quebec Saskatchewan	AAOIFI (disputed [14] )		Fatwa.ca [15]
Canadian Halal Finance Corporation	Murabaha Diminishing Musharakah	2021			Alberta
Halal Homes	Murabaha Diminishing Musharakah				Alberta
Murabaha Homes	Murabaha								[ permanent dead link ]
An-Nur Co-operative			Co-operative						Archived 2021-04-10 at the Wayback Machine
Ansar Co-operative	Diminishing Musharakah	1980	Co-operative		Ontario			Ebrahim Desai [16] [17] [18]
Interest-Free Housing (Formerly ISNA Housing)		2008	Co-operative
Al Ehsaan Housing	Diminishing Musharakah	2007	Co-operative		Saskatchewan
Qurtuba Housing Coop	Diminishing Musharakah	1990	Co-operative		Quebec
Assiniboine Credit Union	Diminishing Musharakah		Credit Union	Yes	Manitoba				Archived 2021-10-31 at the Wayback Machine

Investment products

Comparison of Investment Products

Product	Type	First year of offering	Company	Available through	MER	Sharia Certification	Website
Wealthsimple Shariah World Equity Index ETF (WSHR)	Exchange-traded fund (ETF)	2020	WealthSimple		gold ETF 0.18%, equity ETF 0.5% [19]	Ratings Intelligence [20]	Archived 2024-06-15 at the Wayback Machine
Wahed FTSE USA Shariah ETF (HLAL)	Exchange-traded fund (ETF)	2019	Wahed Invest		0.5% [21]
The SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS)	Exchange-traded fund (ETF)	2019	SP Funds		0.49%
SP Funds Dow Jones Global Sukuk ETF (SPSK)	Exchange-traded fund (ETF)		SP Funds
The SP Funds S&P Global REIT Sharia ETF (SPRE)	Exchange-traded fund (ETF)		SP Funds
Global Iman Fund (IMANX)	Mutual Fund	2008	Global Growth Assets
Manzil Mortgage Fund (MANZL)	Mortgage Fund	2019	Manzil	Manzil/ CI Direct	1.5% [22]
Sukak - Term Deposit	Mortgage Fund	2019	AYA Financial	Moya Financial

Roboadvisors/Investments Managers

Some institutions have started offering accounts including Registered Education Savings Plan (RESP), Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) etc.

Comparison of Islamic Investment Service Providers

Company	First Year of Offering	Fees	Minimum Investment	External Review	Website
Manzil (through CI Direct)	2019	0.6%
Assad Wealth Management at IG Wealth Management	2004	0.6% to 1.35%	$50,000
ShariaPortfolio	2020	0.5 to 2%
Wealthsimple Invest	2021	0.4 to 0.5%	No minimum
Global Growth Assets	2008			Global News [23]
Canadian Islamic Wealth

See also

• Islamic banking and finance
• Islamic finance products, services and contracts
• Challenges in Islamic finance
• Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)

References

1. Hejazi, Walid; Sawwaf, Mohamad (2020-04-15). "Opinion: Embracing Islamic finance presents an opportunity for Canada". The Globe and Mail. Archived from the original on 2021-11-05. Retrieved 2021-11-05.
2. "Mackenzie Investments Partners with Wealthsimple to Launch Canada's First Shariah-Compliant ETF". Bloomberg.com (Press release). Canada Newswire. 12 May 2021. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
3. Mathieu, Emily (12 April 2010). "No-interest MasterCard aims at devout Muslims". Toronto Star . ISSN   0319-0781. Archived from the original on 2021-11-05. Retrieved 2021-11-05.
4. "Islamic mortgage lender's woes leave clients in lurch". CBC News . 20 October 2011. Archived from the original on 5 November 2021. Retrieved Nov 4, 2021.
5. Ha, Tu Thanh (2014-02-19). "RCMP charge missing Toronto financier with $4.3-million mortgage fraud". The Globe and Mail. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
6. Takagi, Andy (2024-04-20). "What is a halal mortgage? Here's what you need to know about why Canada is considering them". Toronto Star. Retrieved 2024-05-05.
7. "AMJA Resident Fatwa Committee resolution about Islamic Home Financing Companies in the US. | AMJA Online". Archived from the original on 2021-11-30. Retrieved 2021-11-30.
8. "Fatwas by Mufti Ebrahim Desai » Askimam". Askimam . Archived from the original on 2021-10-31. Retrieved 2021-10-31.
9. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
10. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
11. explorer2728 (2021-12-18). "Manzil Murabahah Mortgage - Canada". r/HalalMortgageReviews. Retrieved 2025-01-06.
12. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
13. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Retrieved 2024-05-05.
14. explorer2728 (2022-01-17). "EQRAZ - Tawarruq Mortgage - Canada". r/HalalMortgageReviews. Retrieved 2025-01-06.
15. "Home Mortgage Situation in Canada and Islamic Finance Companies". Fatwa.ca. 2023-01-18. Retrieved 2025-01-06.
16. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
17. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
18. "Fatwas by Mufti Ebrahim Desai » Askimam". askimam.org. Archived from the original on 2021-10-31. Retrieved 2021-10-31.
19. "Halal Investing". Wealthsimple. Archived from the original on 2021-11-08. Retrieved 2021-11-08.
20. Ratings Intelligence. "Shari'a Control Committee, Certificate of Sharia – Audit" (PDF). Wealthsimple. Archived (PDF) from the original on 16 July 2023. Retrieved 12 October 2023.
21. WealthBar Financial Services. "Online Wealth Management". CI Direct Investing. CI Direct Investing. Archived from the original on 2021-11-08. Retrieved 2021-11-08.
22. WealthBar Financial Services. "Online Wealth Management". CI Direct Investing. CI Direct Investing. Archived from the original on 2021-11-08. Retrieved 2021-11-07.
23. O'Shea, Sean (26 November 2020). "RESP customers complain about delays accessing money". Global News . Archived from the original on 2021-11-07. Retrieved 2021-11-07.

External links

• https://zoya.finance/