The Liberals are weighing whether to introduce Islamic law–compliant mortgages in Canada, a move critics warn could blur the lines between religious accommodation and the secular rule of law.

As first reported by Blacklock’s Reporter, the April 18, 2024, federal budget (Fairness For Every Generation) revealed that the government is “exploring new measures to expand access to alternative financing products like halal mortgages.”

These mortgages are structured to avoid interest payments, in keeping with Islamic financial doctrine, and may involve shared equity or rent-to-own models.

Access-to-information records show that Canada Mortgage and Housing Corporation (CMHC) commissioned a Halal Housing report, completed March 14 — just weeks before the 2024 budget. The report was ordered due to “the anticipated expansion of this initiative across Canada,” though the cost of the study was not disclosed.

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The budget announcement follows a 2023 federal grant, also for an undisclosed amount, to the Islamic Family Social Services Association of Edmonton to study “Islamic financial products” such as interest-free mortgages.

According to the Halal Housing group: “The Halal Housing Lab represents a pivotal step in addressing the need for affordable, culturally appropriate housing within Muslim communities in Canada. By intricately weaving Islamic values with modern housing needs... the lab sets a precedent for inclusivity and sustainability.”

The report notes that “the faith and culture of Muslim people make traditional interest-based loans and mortgages unavailable to them,” and that while some halal-compliant options exist, they are “only on an individual basis, not on a commercial scale.”

Canada’s Muslim population is now 1.8 million. Halal Housing says they represent “the fastest growing group in need of affordable housing.”

The government has not confirmed whether it will proceed with any legislative changes to support halal mortgages.