Ontario rejected Shariah law and the use of any faith-based arbitration in the province five years ago. But a U of T professor now wants to introduce students at the Rotman School of Management to the concept of Shariah finance. Professor Walid Hejazi argues that without expertise in the sector, Canada risks losing out on a rapidly growing $800-billion global market for financial products consistent with Islamic law. Hejazi, who specializes in international competitiveness at Rotman, says that while international banks such as HSBC, Deutsche Bank and Lloyds TSB already offer a range of Shariah-compliant financial products, no major Canadian bank does.
Hejazi has developed a three-day executive program – which he believes to be the first of its kind in Canada – that will teach participants the differences between Shariah-compliant and conventional financial instruments using retail and commercial banking examples, such as mortgages and bonds. (Islamic law prohibits the payment or acceptance of interest on loans.) Program participants will also learn about Shariah-compliant derivatives and the legal and tax implications of Shariah finance. Hejazi says Canada’s attractiveness to foreign investors has been slipping over the last 40 years. He argues that expanding Islamic finance would make Canada a more appealing destination for capital internationally.
However, Tarek Fatah, founder of the Muslim Canadian Congress, a liberal group, argues that Shariah financial instruments have a ghettoizing effect on Muslims because they separate people based on their religion. He also fears broader repercussions. “The danger is that we are legitimizing Shariah law,” he says.
Hejazi rejects Fatah’s claims. He says Canadian Muslims are currently at a disadvantage because they cannot access Shariah-compliant products at conventional banks. “If the main banks understand and offer these products, they’re regulated, and there’s more competition. We’re simply talking about financial securities with different characteristics that anyone – Muslim or non-Muslim – can use.”