# Islamic banking and finance in Canada

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 | External Review |
| 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 |
| 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 |
| 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 | | | | |