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. A growing number of Canadian fintech firms now offer Shariah-compliant home-financing models based on co-ownership (diminishing partnership) rather than conventional interest-bearing mortgages.
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.
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 ProductsCompanyIslamic modelYear of InceptionFunderFunding from Banks/ Credit UnionsServing provinceSharia StandardsSharia CertificationExternal ReviewWebsiteEQRAZCommodity Murabaha2022Alberta British Columbia Manitoba New Brunswick Newfoundland and Labrador Nova Scotia Ontario Prince Edward Island Quebec SaskatchewanAAOIFIShariyah Review Bureau Mufti Mirza Zain Baig (CCIRI) IjaraCDC CanadaIjarah-wa-Iqtina2008YesAMJA Ebrahim DesaiAya FinancialDiminishing MusharakahYesOntarioEbrahim DesaiZero MortgageDiminishing MusharakahYesEbrahim DesaiManzilMurabaha2019Manzil Mortgage FundNoOntarioAAOIFI (disputed )Ebrahim DesaiManzilDiminishingMusharakah2019Manzil Mortgage FundNoAAOIFIEbrahim DesaiCanadian Halal Finance CorporationMurabaha Diminishing
Musharakah2021AlbertaHalal HomesMurabaha Diminishing
MusharakahAlbertaMurabaha HomesMurabaha An-Nur Co-operativeCo-operative Ansar Co-operativeDiminishing Musharakah1980Co-operativeOntarioEbrahim DesaiInterest-Free Housing (Formerly ISNA Housing) 2008Co-operativeAl Ehsaan HousingDiminishing Musharakah2007Co-operativeSaskatchewanQurtuba Housing CoopDiminishing Musharakah1990Co-operativeQuebecAssiniboine Credit UnionDiminishing MusharakahCredit UnionYesManitoba
Investment products +Comparison of Investment ProductsProductTypeFirst year of offeringCompanyAvailable throughMERSharia CertificationWebsiteMackenzie Shariah Global Equity FundMutual Fund2024MackenzieAssad Wealth Management0.8Rating IntelligenceLinkWealthsimple Shariah World Equity Index ETF (WSHR)Exchange-traded fund (ETF)2020WealthSimplegold ETF 0.18%, equity ETF 0.5% Ratings Intelligence Wahed FTSE USA Shariah ETF (HLAL)Exchange-traded fund (ETF)2019Wahed Invest0.5% The SP Funds S&P 500 Sharia Industry Exclusions ETF (SPUS)Exchange-traded fund (ETF)2019SP Funds0.49%SP Funds Dow Jones Global Sukuk ETF (SPSK)Exchange-traded fund (ETF)SP FundsThe SP Funds S&P Global REIT Sharia ETF (SPRE)Exchange-traded fund (ETF)SP FundsGlobal Iman Fund (IMANX)Mutual Fund2008Global Growth AssetsManzil Mortgage Fund (MANZL)Mortgage Fund2019ManzilManzil/ CI Direct1.5% Sukak - Term DepositMortgage Fund2019AYA FinancialMoya 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 ProvidersCompanyFirst Year of OfferingFeesMinimum InvestmentExternal ReviewWebsiteAssad Wealth Management at IG Wealth Management20040.6% to 1.35%$50,000Manzil (through CI Direct)20190.6%ShariaPortfolio20200.5 to 2%Wealthsimple Invest20210.4 to 0.5%No minimumGlobal Growth Assets2008Global News 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
External links https://zoya.finance/