The Alberta government has introduced legislation that will allow provincially regulated banks to offer halal home financing products.

In Islamic belief, paying and receiving interest is prohibited; This means traditional interest-based mortgages are not an option for many Muslims in Canada.

A few private loan firms currently offer alternative financing plans that do not include interest payments, but these alternatives are not available at any of Canada’s larger banks.

St. Albert Finance Minister Nate Horner said the law allows credit unions and ATB Financial to offer halal mortgages, but banks won’t have to do so.

Horner said that he expects these financial institutions to develop their products in a short time, as the changes in the legislation are demanded by the sector.

There are several different types of halal home financing; for example, a program in which a financial institution purchases a home on behalf of a customer and charges fixed monthly payments (including a profit margin) until the customer’s home is paid off.

This report by The Canadian Press was first published Nov. 4, 2024.