Al Rashid Mosque cuts ties with Edmonton-based halal mortgage company

Canada's oldest mosque is no longer working to validate that the halal mortgages offered by an Edmonton-based company comply with Islamic standards.

But representatives from Edmonton's Al Rashid Mosque, which opened in 1938, say they're continuing efforts to create more halal financing options, working with the Alberta government.

In Islam, paying or earning interest is forbidden, which means many Muslims can't access conventional Canadian mortgages and still adhere to their religious beliefs.

Companies like the Canadian Halal Financial Corp., created in 2021, have been offering financing that's halal, an Arabic term that translates to permitted, or allowed.

Al Rashid Mosque previously reviewed the corporation's mortgages and issued a halal certificate, after working for years to find a solution for Muslims trying to get into the housing market.

But last week, the mosque's Islamic finance committee said in a statement that the partnership is over after "some concerns have come to our attention."

Committee member Khalid Amin told CBC News that the mosque and the corporation had a memorandum of understanding to guide their work, and there were issues around those terms being met. He said he couldn't give specifics for confidentiality reasons.

"Whatever mortgages that Al Rashid has signed off on and issued a certificate, they remain valid, provided they're following the terms and conditions that we've executed," he said.

Thomas Lukaszuk, one of two principal executives behind Canadian Halal Financial Corp., said the change is just the next step in the company's growth.

He said since the company started up, it's now using more standardized contracts endorsed by the Edmonton Council of Imams and validated by a fatwa, a type of religious edict, from Cairo-based Al Azhar University, a prominent authority on Islamic law.

"Our reputation and our process is well understood by imams and by mosques, not only across Alberta but across Canada," Lukaszuk said. "There is no more need to have [the contracts] continuously, individually reviewed by a singular mosque in Edmonton."

He added that the company is seeing significant demand for halal home financing, with people reaching out from across Alberta and beyond.

He said that's another reason it doesn't necessarily make sense for Al Rashid Mosque to verify each contract, since that process also came with a fee, and clients might not have a connection with an Edmonton mosque or prefer to get an extra assessment from religious leaders in their own community.

Lukaszuk said clients can still seek guidance from Al Rashid Mosque with the process, if they want.

But Amin said ensuring Islamic compliance is a nuanced process, with criteria beyond just avoiding interest.

"When you're doing a halal mortgage, for instance, it's very important that the sequence of events and the timing is done [in accordance with Islam], because it could be the difference between halal and not halal," he said.

"It's not a maybe; it's a must. Because if you miss a step you've ruined the whole process and then it becomes non-compliant."

Amin said the mosque has qualified scholars in Islamic finance who can reliably monitor that process. The mosque is widely recognized for that credibility, he said.

The Alberta government is looking at new halal financing options as a priority — Finance Minister Nate Horner's mandate letter from Premier Danielle Smith lists it as one of the initiatives he's expected to pursue.

Amin said the mosque is working with the province on the details. The mosque's statement says it hopes to create a halal mortgage product that's competitive with a conventional mortgage.

"It's important for people to feel ... that it's done religiously properly," he said.

"The demand is there. The people want it for sure. The criteria is just having the product available that fits rigorous Islamic terms or conditions."