Torys LLP analysis of Canada's Budget 2024 commitment to explore halal mortgages

In its 2024 federal budget (tabled 16 April 2024), the Canadian government stated its intention to 'explore new measures to expand access to alternative financing products, like halal mortgages'. Torys LLP's analysis stresses the careful wording: this is an intention to explore, not a commitment to implement. The budget noted that consultations with financial-services providers and diverse communities had begun in March 2024, with an update promised in the 2024 Fall Economic Statement. The article frames the three structures typically used for Shariah-compliant home finance — a declining-balance partnership (musharaka), rent-to-own (ijara), and sale at a mark-up (murabaha) — and identifies the principal obstacles in Canada: institutions must navigate a complex matrix of federal and provincial legislation, and federally regulated financial institutions face uncertainty around mortgage-guideline and other risk requirements. Potential enablers the authors flag include changes to the tax treatment of these products or a new regulatory sandbox for providers, while ensuring adequate consumer protections.