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By rdnewsNOW Staff

Regulatory sandbox

Alberta says they are working to expand access for halal mortgage financing

Apr 13, 2023 | 10:13 AM

The province says they are exploring opportunities to expand Islamic compliant, or halal, financing for Albertans.

The government states they are working with the Alberta Council of Imams and the Al Rashid Mosque.

According to officials, many Muslims are unable to access traditional mortgage financing through regulated financial institutions, as paying or charging interest is prohibited under Islamic law. Halal financing would provide mortgages to qualified homebuyers using fees and charges that resemble regular mortgage payments.

“As Premier, I’m truly blessed to be able to advocate on behalf of all communities. With Alberta’s innovative approach to enable halal mortgages, more people may be able to access mortgage lending services in this province. Making Alberta an easier place to practise and live by one’s faith is an important part of building a secure and inclusive Alberta for those from all around the world who dream of a better life,” said Premier Danielle Smith.

In July 2022, the province says they introduced a regulatory sandbox to offer businesses temporary relief from certain legislative and regulatory requirements. A regulatory sandbox is described as a space created and controlled by a regulator to allow the testing of processes to be conducted under supervision before their full entry into the marketplace.

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They say this would make it simpler for them to research and adapt their new products and services for the market, as various countries around the world have done for different industries and sectors of the economy.

Government officials say this would make Alberta the first province in Canada to offer halal financing by a provincially regulated financial institution, creating a competitive advantage for the province.

“We are laying the foundation for halal mortgages in Alberta so the Muslim community can easily own affordable housing in similar terms as regular mortgages. This initiative will allow our community greater opportunity for financing while respecting our Muslim faith,” said Omar Mahmoud, President of the Edmonton Council of Imams.

Applicants to the sandbox must meet rigorous entry requirements to ensure consumer protection, including:

• be physically present in Alberta
• offer financial products or services
• offer new and innovative products in Alberta
• provide a sound and viable business plan
• meet other terms, conditions or restrictions set out by the Minister of Finance to ensure proper oversight

After being researched, the government would work towards introducing legislative amendments that would enable Alberta financial institutions to offer halal financing.

The province confirms that Alberta has the mechanisms in place to support the introduction of halal financing and that the regulatory sandbox could help introduce it in an expedited way. They say it also creates the opportunity to ensure that required legislative changes would be compliant with Islamic law.

“We are pleased to have the mechanisms in place to support Albertans with new financial solutions such as the development of halal financing through exemptions available under the regulatory sandbox. By creating a flexible regulatory environment, we can attract new and innovative financial services into the province while also ensuring Alberta consumers are protected,” said Travis Toews, President of Treasury Board and Minister of Finance.