We have carefully read the explanations in The duty by Jocelyn Grira, associate professor of finance at the Faculty of Business at Athabasca University, regarding Islamic mortgages. We come away with more questions than answers.
Remember that these clarifications follow the announcement by which the federal government indicates, in its 2024 budget, to explore new measures to “expand access to Islamic mortgage loans”. As Mr. Grira confirms, it is a question of allowing orthodox Muslims to “comply with the precepts and doctrine of the Muslim religion”, and more particularly with a relatively recent interpretation of the prohibition made in the Koran of usurious interest.
How should this divine prescription weigh on the decisions of a democratic state that must be secular? How can we not see this as a blatant obstacle to the separation of the State and religions?
Inclusion measure?
How will this measure ensure the interests of Canadians, including Muslims themselves? Indeed, the role of tax laws and banking laws is above all to protect the citizen and ensure the general interest. However, there is no reason to believe that this is the case for this surprise announcement from the government. Have there been studies supporting that this type of loan does not carry excessive risks for borrowers?
Tarek Fatah, of the Muslim Congress of Canada, who died in 2023, repeatedly alerted public opinion to the fact that certain financiers abuse believers who want to respect Sharia law by charging fees that are much higher than in a traditional bank . Like him, we consider that there is a serious danger in opening the door to so-called Islamic banks, which, in fact, impose an interpretation of the Koranic prohibition of ribâ which benefits them.
Community pressure
Mr. Grira also confirms that a so-called Islamic mortgage loan ultimately costs the consumer more than a traditional loan, but seems to justify it by drawing a parallel with eco-friendly or organic products, which are more expensive than traditional products. This parallel is questionable to say the least. In fact, it ignores the pressure exerted by the most orthodox Muslims so that “real” Muslims comply with this new injunction.
Just as the multiplication of prayer rooms in schools and workplaces creates pressure on Muslims who do not pray, the multiplication of halal products (legal according to religion) only broadens the field of prayer. haram (illicit) and therefore increase the pressure on Muslims who consume traditional products. The multiplication of sources of prohibition for Muslims means that they run the risk of being stigmatized as “bad Muslims”.
Beyond the proportion of Muslims who take out an Islamic mortgage loan, which Mr. Grira estimates at 1%, we must consider the longer-term effects on the Muslim population in general, the communitarian influence that this creates and which does not ultimately benefits only an increasingly fundamentalist Islam.
The risk linked to Islamic banks
Furthermore, this announcement from the federal government seems to come out of a hat. Who exactly is claiming these Islamic mortgages? Now we learn, particularly from Mr. Grira’s explanations, that there is an Islamic finance market in Canada that needs to be regulated. In another intervention, Mr. Grira even draws a parallel with the legalization of cannabis. However, drug trafficking is a well-documented issue, and the law on the legalization of cannabis was passed as part of an informed debate supported by evidence. Before legalizing Islamic banking transactions, could we be enlightened on the extent of the phenomenon, its ins and outs?
Mr. Grira rightly explains to us that a “halal” mortgage loan can only be made as part of a halal “combo” offered in a completely Muslim environment, and therefore necessarily by an Islamic bank. Thus, contrary to what we are told elsewhere, this banking product would be exclusively offered to Muslims, which contradicts the principle of inclusion. But above all, since the 1970s, Islamic financial institutions have supported and encouraged the spread of radical Islam around the world.
Thus, the Islamic Development Bank supported Hamas, and the Al-Taqwa banking group was liquidated after appearing on the US State Department’s list of terrorist organizations. Are we certain that Islamic banks in Canada will not serve such purposes?
The State does not have to adapt to religious beliefs
Finally, Mr. Grira’s analysis that the initiative would be an attempt by the federal government to redeem itself from the Muslim community because of its foreign policy linked to the war between Israel and Hamas, if it is confirmed, seems incredibly irresponsible to us. Should we indulge in such political patronage? If the charm operation is not enough, will we then expand the Law concerning inheritance rights to allow it to integrate the very detailed Islamic regulations on inheritance?
This announcement from the federal government was not the subject of any public debate and seemed to take everyone by surprise. Will the citizen have to take a Sharia 101 course in order to understand the recommendations of the federal budget? Will he have to do the same for the religious laws of Sikhism, Judaism or Shintoism? This clearly goes against any conception, however minimalist, of secularism.
For all these reasons, we invite the federal government to publicly announce that it will no longer facilitate the establishment of such a religious banking system in Canada.