Halal mortgages in federal budget about ‘being equal’ for Muslims, providers say

Federal budget references to mortgage products aimed at Canadian Muslims have members of the community celebrating, along with the mortgage providers that look to serve them, despite a lack of detail from the government on what is to come.

In Tuesday’s budget documents, the federal government indicated that it’s “exploring new measures to expand access” to financing methods such as “halal mortgages.”

The budget provided few details about the plan, other than to say the government had been consulting “financial services providers and diverse communities” and that an update would come in the 2024 fall economic statement. Despite no specifics, it was a welcome addition to the budget for the Muslim community.

“It was very happy news for me,” said Abdullah Mohiuddin, who has already taken out an Islamic, or halal, mortgage to purchase a home in the Edmonton area. He said he welcomed the government’s announcement that it would be finding a way to increase access to a financial product he believes his community needs.

Several firms in various Canadian provinces offer halal mortgages. Halal is an Arabic word that translates in English to “permitted” or “allowed” under Islamic law.

These mortgages are deliberately structured to adhere to both Canadian law and the belief systems of many Muslims. Interest, which is referred to in many Islamic texts as “riba,” is forbidden.

Abdullah Mohiuddin took out a halal mortgage to buy his Edmonton-area home. He says he’s pleased Ottawa plans to find a way to increase access to the mortgages for the Muslim community. (Peter Evans/CBC)

Although interest isn’t charged, there are still costs associated with halal mortgages. In many cases, the costs are higher than those associated with conventional mortgages, and the mortgages are often not available at the branches of mainstream financial institutions.

“It seems like it’s a little bit expensive,” Mohiuddin said, adding he believes the lack of established legal definitions for a halal mortgage in Canada is behind the higher costs. 

Announcement boosts credibility

Muslims looking for a halal mortgage are still going to be paying carrying costs for a loan to purchase their home.

Providers in the industry said these costs can be higher because while there is demand, there are fewer providers — and some halal mortgage providers are unable to foreclose due to religious restrictions, which can increase what some financiers assess as risk.

That could be changing with the federal

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Owners of small businesses say they feel left out of B.C.’s budget

When Alper Tasdurmaz opened his Turkish-style bakery in Vancouver’s Kitsilano neighbourhood in 2018, business was good. So good, in fact, he was able to open another location along Broadway.

But a series of unfortunate events followed: the COVID-19 pandemic, rapidly rising costs associated with running a business, and the construction in front of his second shop have created significant challenges.

That’s why he and many other small business owners were disappointed when B.C.’s budget came out on Tuesday. 

“All the budget goes to some other places but not any part of it to the small and medium business,” he said. “It was really frustrating.”

Chris Jones, who owns and operates two restaurants in Victoria, B.C., says he, like Tasdurmaz, would have liked to see something in the budget offering relief to businesses that are still recovering from pandemic losses while simultaneously experiencing increased costs. 

He said food prices are up 11.4 per cent and passing that cost on to customers wouldn’t work. 

“There’s going to be a threshold of sticker shock for our consumer where 11.4 per cent on a $17 plate of food is $2,” he told On The Island host Gregor Craigie. “Increasing our menu prices $2 per year is not sustainable.”

The budget focused heavily on rebates and tax credits to address affordability for individuals and families.

But, Tasmaduraz says, he pays taxes too, and his business is his livelihood. 

“We are helping the economy too in B.C., but we cannot get any supports from the local government.”

Increased carbon tax a particular concern

Greater Langley Chamber of Commerce CEO Cory Redekop says the chamber had previously asked the province for help lowering the costs associated with doing business in B.C. 

“The rising costs we are all seeing in our personal lives are also hitting our small businesses, and making it harder and harder to for them to succeed,” Redekop said in a press release.

“This budget missed an opportunity to underpin B.C. small businesses as they head into a time of economic headwinds.”

Of particular concern, according to the B.C. Chamber of Commerce, was the increased carbon tax.

Beginning April 1, the carbon tax will increase by $15 per tonne annually, until it hits $170 in 2030. This applies to the purchase and use of fossil fuels — which Chamber of Commerce President and CEO Fiona Famulak said will hit small businesses hard. 

“This is going

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