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Islamic banking and finance in Canada

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The demand for Islamic banking and finance has grown in Canada due to the growing Muslim population 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.

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. UM financial was ordered to go into receivership by the Ontario Superior Court on October 7, 2011. 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.

Islamic Mortgage in the main stream

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

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 Ebrahim Desai
Aya Financial Diminishing

Musharakah

Yes Ontario Ebrahim Desai
Zero Mortgage Diminishing

Musharakah

Yes Ebrahim Desai
Manzil Murabaha 2019 Manzil Mortgage Fund No Ontario AAOIFI (disputed ) Ebrahim Desai
Manzil DiminishingMusharakah 2019 Manzil Mortgage Fund No AAOIFI Ebrahim Desai
Eqraz Murabaha 2022 All provinces except Quebec AAOIFI (disputed ) Fatwa.ca
Canadian Halal Finance Corporation Murabaha

Diminishing

Musharakah

2021 Alberta
Halal Homes Murabaha

Diminishing

Musharakah

Alberta
Murabaha Homes Murabaha
An-Nur Co-operative Co-operative
Ansar Co-operative Diminishing

Musharakah

1980 Co-operative Ontario Ebrahim Desai
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

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% Ratings Intelligence
Wahed FTSE USA Shariah ETF (HLAL) Exchange-traded fund (ETF) 2019 Wahed Invest 0.5%
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%
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 mimimum
Global Growth Assets 2008 Global News
Canadian Islamic Wealth

See also

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.{{cite web}}: CS1 maint: numeric names: authors list (link)
  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.{{cite web}}: CS1 maint: numeric names: authors list (link)
  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. Archived from the original on 2021-11-08. Retrieved 2021-11-08.
  22. WealthBar Financial Services. "Online Wealth Management". 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.

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