The Canadian government announced that it will explore options to broaden access to financing alternatives for homebuyers, including halal mortgages, as part of an initiative by Canadian Prime Minister Justin Trudeau to support Canadians who want to become homeowners, including Muslim Canadians.
PM #JustinTrudeau to introduce 'halal mortgage' for #Muslims in Canada
Read more : https://t.co/rXKbBqeGxp pic.twitter.com/bTrLQBND9l— MuslimMirror.com (@MuslimMirror) April 18, 2024
The revelation came during a recent budget speech in the Canadian Parliament, where the ruling Liberal Party unveiled plans to consult with financial service providers and other communities to better understand the diverse needs of Canadians seeking to buy and own homes.
“This could include changes in the tax treatment of these products or a new regulatory sandbox for financial service providers while ensuring adequate consumer protections are in place," the Canada Budget 2024 document said regarding the plan.
The proposals include offering alternative methods of home ownership, such as halal mortgage payments for Muslim Canadians. Although alternative financial institutions such as Islamic banks have offered halal mortgages since 2021, Trudeau and his finance minister, Chrystia Freeland, recently announced that the Canadian government would explore halal mortgages and include them in the federal budget, with an idea to allow public banks to offer them as an alternative funding method just like what private banks do.
In addition, while some financial institutions and banks offer mortgages and payment options compliant with Islamic law, none of Canada’s five “Big Banks” currently offer them.
@nixonbcmortgage A Halal mortgage, often referred to as an Islamic mortgage, is a home financing solution structured in accordance with Islamic law (Sharia), which prohibits the payment or receipt of interest. Instead, these mortgages typically use alternative models like Murabaha (cost-plus sale), Ijara (leasing), or Musharaka (partnership) to enable home financing without conventional interest-based terms. #HalalMortgageCanada #FirstHomeCanada #CanadianBudget2024 #BankOfCanada Epic Motivational - Viongga Music
“Canada is a country that celebrates diversity and inclusion. This new ‘Halal Mortgage’ program is a testament to our commitment to fostering an inclusive society where everyone has equal access to opportunities, including in the housing market,” Prime Minister Justin Trudeau enthusiastically said regarding the proposal to introduce halal mortgages.
The Canada Mortgage and Housing Corporation (CMHC) will administer the new program in collaboration with Islamic financial institutions. CMHC will provide Islamic banks and credit unions with the necessary funding to offer halal mortgages to eligible homebuyers. The program will also include financial literacy and homeownership to help potential homebuyers understand the terms and conditions of Sharia-compliant mortgages.
Aside from plans to introduce halal mortgages, the Canadian government is also exploring other ways to support the financial needs of the Muslim Canadian community. These include developing Islamic banking and financial products and establishing a national zakat fund to support charitable activities in line with Islamic principles.
Islam considers charging interest in loans to be a form of usury and sees gains made through interests to be unjust or even haram (forbidden) in Islam. Because traditional mortgages and loans incur interest, many Muslim Canadians have been hesitant to take out mortgages, posing a challenge for them and limiting their ability to buy homes.
PMJTs Halal mortgages sound as convoluted as CRA tax returns. Reminiscent of Freeland responding to questions. Religion should should not come into play in RE transactions. As a Christian can I apply for one and if denied file a Human Rights Complaint?https://t.co/cK3WWOoVO7
— Lt. (Retired LAPD) Frank Columbo (@jsam10983741) April 23, 2024
The plan to introduce halal mortgages in Canada has attracted both support and criticism from various groups and individuals. Farhat Rehman, President of the Canadian Islamic Congress, supported the decision, calling it a “historic moment for Muslims in Canada. The introduction of the ‘Halal Mortgage’ program will not only facilitate homeownership but also empower our community to participate more fully in the Canadian economy.”
Others criticized the plan, citing religious discrimination and arguing that such a move would only benefit Muslim Canadians at the expense of other communities, making the proposal inherently unfair to non-Muslim Canadians.
Michael Taube, a columnist and a former speechwriter for Canadian Prime Minister Stephen Harper, criticized the decision in his opinion article and even argued that halal mortgages not only exclude non-Muslim Canadians but might also hurt Muslim Canadians.
“It is possible that Halal mortgages won’t be readily available in non-Muslim communities, however. Christians, Jews, Hindus, Buddhists, and others don’t follow the tenets of Islam and wouldn’t qualify for this type of mortgage. It would be an extremely limited offering at best, which goes against the very nature of operating a bank or lending institution in a Western democracy,” Michael Taube, a licensed mortgage agent, wrote.
