The Trudeau administration has announced plans to offer “halal mortgages” as part of the 2024 federal budget, aiming to make home ownership more accessible to Muslim Canadians and other communities. This initiative is set to create more inclusive financial products that align with Islamic law, which prohibits interest for being exploitative.
Halal mortgages differ from traditional loans as they do not involve interest payments. Instead, they use alternative financing methods like Ijara (lease-to-own), Musharaka (partnership ownership), and Murabaha (cost-plus financing). These models provide a way for buyers to purchase homes without compromising their religious principles.
The Canadian government is considering changes to tax treatments and regulatory frameworks to support these new financial products. Detailed plans will be unveiled in the fall after ongoing consultations with financial service providers and community representatives. This move by the government aims to diversify the financial sector and address the unique needs of Canada’s Muslim population.