Can Canada be poised to be the hub of Islamic finance in North America?

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1. WEB EXCLUSIVE Can Canada be poised to be the hub of Islamic finance in North America ? Canada is considered one of the most secure countries in the world in terms of investment, as confirmed by Moody’s Investors Services, S&P, Fitch Ratings and DBRS through their ratings and thus the country offers Islamic finance an enabling environment for rapid and balanced development. HICHAM BENKIRANE explores. Hicham Benkirane is CEO and founder of Think Tank Ethics Canada. He can be contacted at thinktank. ethics@gmail.com. The arrival of the Liberal Party to power in 2015 marks a definite improvement in the vision and contribution of cultural diversity to social and economic cohesion. The humanist management of the Syrian refugee crisis by the current government has given it high credibility at national and international levels, not to mention that its foreign policy has taken a distance from its southern neighbor especially after two terrible mandates of the Conservative Party (2006-15). At the same time, it would be wise to note the role played by Canadian public media coverage of various events affecting Muslim communities especially the terrorist attack on the Quebec mosque in 2016. The participation of Canadian Prime Minister Justin Trudeau and his counterpart in the province of Quebec, Philippe Couillard, in the funeral ceremony in the aftermath of the attack was well received by the Muslim community. In such a climate, the retail sector is interested in Halal products. Currently, almost all significant food distributors reserve space in their stores for Halal products, such as Walmart, Loblaws, Sobeys and Food Basics. The year 2010 saw the creation of an Islamic finance working group, Toronto Financial Services Alliance (TFSA), which embraces the concept of public-private partnership and had shown interest in making the city of Toronto a hub of Islamic finance in North America. Several communications have been addressed by TFSA to both levels of government (federal and provincial) to get them involved in setting up Islamic finance. This effort did not have the expected result especially with the last federal government which was hostile to the Islamic question. Upon the arrival of the Liberal Party government, TFSA commissioned a study in 2016 through Thomson Reuters’s Islamic Finance Gateway subsidiary to explore the opportunities presented by Islamic finance to the Canadian market. In the same vein, the federal government is trying to send positive signals to attract more investors into this sector. In May 2017, Trudeau participated in the launch of Power Corporation’s Halal investment through its Toronto subsidiary Canadian Shareowner Investment. A robotic advisor platform has been put into service called Wealthsimple and has already attracted more than 30,000 Canadian investors with an investment of US$1 billion. The Canadian market barriers Despite the efforts mentioned, the Canadian market is still conservative when it comes to direct foreign investment. For example, digital bank ING Direct which ended up being bought by the Bank of Nova Scotia, the third-largest Canadian bank. Similarly, an attempt by US company Verizon in 2013 to invest in the Canadian telecommunication market failed. The financial institutions face a big challenge with the double regulation at the federal and provincial levels. For example, the banks are subjected to the Bank Act of 1991, and at the same time MARCH 2018 TBC 11th IFN World Leaders Summit Dubai 13 IFN Oman Forum Oman © th EVENTS DIARY also subjected to several provincial laws and regulations like consumer protection legislation, not to mention the tax burden at both federal and provincial levels which represents an additional challenge for Islamic finance investors. Leverage projects for Islamic finance in Canada An extended reflection preceded the beginning of the Think Tank Ethics Canada Project in 2017, aimed at creating shared space for thought and discussion among professionals to promote Islamic finance locally. In its next release and with some local and international partners, this project aims to become a platform for the framing and promotion of various local initiatives related to the development of innovative solutions in the Islamic finance field. In September 2017, a first Canadian international online seminar took place and brought together panelists and participants from several countries including the US, the UK and Canada itself. Another strategic partner is the Infrastructure Bank of Canada which was created in 2017 by the Canadian government in the spirit of a publicprivate partnership. The ultimate goal is to fund major infrastructure projects with a federal government contribution of US$35 billion. This significant project is part of the US$180 billion infrastructure investment plan. In conclusion, to enable the development of Islamic finance in Canada, the government should think about issuing Sukuk, and international prospects must cooperate with strategic partners such as TFSA and other existing incentives. IFN Australia Forum Sydney APRIL 2018 TBC 21 IFN Morocco Forum Casablanca 31st January 2018