Growth of Islamic Finance in Canada

Though relatively underdeveloped compared to some other Western jurisdictions, namely the UK and the US, Islamic finance is making small but steady strides in the Canadian market. Rehan Huda discusses the correlation between the growth in size and affluence of the Canadian Muslim community and growth in the level of observance, leading to more vocal demand for Islamic financial products and services.

The Canadian Muslim population is rich in cultural, ethnic and linguistic diversity and is one of the fastest growing in Canada with a current population estimated to be over 1.2 million. Approximately half of the country’s Muslim population resides in the Greater Toronto area and most of the large cities have experienced significant growth in Muslim immigration over the past decade. The Canadian Muslims are among the best-educated communities in the country and they have the lowest median age as well as larger family sizes. The population of Muslims in Canada is projected to double within the next 10 years.

2014: a review

Some of the developments in Canada in the field of Islamic finance over the year 2014 are in the areas of education as well as the introduction of new Islamic investment products.

The Rotman School of Management within the University of Toronto is Canada’s leading business school and continues to provide a leadership role in Islamic finance education. It introduced Canada’s first MBA course in Islamic finance, which is now entering its fourth year and has been a top-ranked course since its inception.

In a recent interview in a major Canadian newspaper, Walid Hejazi, an associate professor at the Rotman School of Management, stated that six years ago he discovered that half the people in his program had an increasing desire to learn more about the Middle East. It was not surprising given the fact that international students comprise a larger and larger portion of enrolment at the school.

“At the time there was very little offered in terms of Islamic finance on the curriculum,” he said. So he took it upon himself to build a Middle East-focused curriculum, starting with study tours to the region. After the fourth junket, he introduced a course on Islamic finance. The study tours and course, which focuses on business strategy and economic diversification, have generated a tremendous demand from both local and international students. The Islamic finance class is now at capacity with more waiting to get in. “The demand reflects the interest many students have in that part of the world economically,” noted Walid.

The Rotman School has also held several roundtables and conferences over the past years that cover both Islamic finance and business opportunities in the Middle East. There has been strong demand for these events, and many executives from the Toronto financial community have attended. This is indeed a reflection of the increased desire on their part to learn about, and hopefully become more involved in, Islamic finance. Discussions regarding potential Sukuk issuances for Canadian corporates have begun with attendees from these events and there is growing interest to initiate such transactions in the Canadian market.

At the domestic level, there are several Shariah compliant mortgage products as well as investment funds that continue to operate. Islamic housing cooperatives provide funding, though very limited, for home financing. On the commercial finance side, there have been several Shariah compliant financing for purchases of Islamic centres, Islamic schools and commercial properties for Muslim businesses. These financings were done by Canadian financial institutions including several major credit unions. A number of real estate projects are currently being undertaken that will be financed by using Shariah compliant commercial mortgage contracts.

In terms of Shariah compliant investment funds in Canada, the largest is the mutual fund of the Bullion Management Group, a firm specialising in purchasing and storing physical gold, silver and platinum bars as an investment.

Another mutual fund is the Global Iman Fund which is owned by Global Growth Assets which is a part of the Global Financial family of companies that is one of the largest independent financial institutions in Canada. The fund is currently managed by UBS and is based on the Dow Jones Islamic Index.

The Everest Group based out of the oil-rich province of Alberta is in the process of converting its existing mortgage and real estate funds into Shariah compliant funds. These will be the first Shariah compliant asset-backed and income-yielding funds for the Canadian market.

2015: a preview

It is expected that more private equity and wealth management-related Shariah compliant products will be developed in 2015. There is a need for an Islamic mortgage product as well as a diversified set of retail investment products. The recent developments indicate that there may be further interest from mainstream Canadian financial institutions to explore Islamic financial products. As the Canadian market is becoming more and more attractive to international investors, there will also continue to be opportunities for Islamic financial institutions to participate in the Canadian market and help develop Islamic finance opportunities there. In this respect, there are a number of initiatives that are being undertaken to explore such opportunities as major Islamic financial institutions seek to diversify their assets and their investment risk.


Rehan Huda is the director of Amana Canada Holdings. This article first appeared in Islamic Finance News (28 January 2015, Volume 12, Issue 4, Page 22). For more information, please visit