Toronto, canada—With a growing Muslim population, stable economy and openness to the world, Canada is poised to become the North American hub for Islamic finance, local experts have predicted. But many say Canadians must first better understand the growing financial sector, and support from the federal and provincial governments would go a long way to boost its development.
“When you look at global finance, [Islamic finance] is a very, very high growth area and for Toronto, as an international financial centre, it should be a table-stake for us,” said Janet Ecker, president and CEO of the Toronto Financial Services Alliance (TFSA). Islamic finance is a socially responsible financial system that emerged in the 1970s and uses Islamic law (sharia) to regulate various sectors, including banking, investments, and insurance.
Under the system, Islamic investments are often referred to as halal investments, or sharia-compliant investments. A recent report by the Toronto Financial Services Alliance (TFSA), a public-private entity that seeks to build Toronto as a global financial centre, and Thomson Reuters predicted that Canada could be home to almost $18bn in sharia-compliant mortgages, while international Islamic bonds (sukuk) could generate $130bn in national infrastructure investments.
Ecker said Canada’s stable financial market and risk management expertise, coupled with a large and growing Muslim population and an openness to the world, makes it an ideal place to develop Islamic financial opportunities. Just over one million people identified as Muslim on the most recent Canadian household survey in 2011, and that number is expected to grow to around three million by 2030.