Toronto is the financial services capital of Canada and one of North America’s premier financial centres. One of the most rapidly growing segments of the international financial services sector is Islamic finance. Recognizing this trend, a number of other financial centres are positioning themselves as global centres for Islamic Finance, including London, England, Dubai, UAE, Bahrain and Kuala Lumpur, Malaysia.
The City of Toronto and its financial cluster developed a unique public-private partnership called the Toronto Financial Services Alliance (TFSA). The mandate of TFSA is to enhance and promote the competitiveness of Toronto as a premier international financial centre. One of the ways to do this is to build leading hubs of expertise in defined areas. With a prominent and growing Canadian Muslim community and strong and innovative financial sector, there is every reason to believe that Toronto could emerge as a North American centre for Islamic finance. Exploring the opportunities that exist in this developing segment is consistent with the TFSA’s mandate and in 2009 the TFSA created an Islamic Finance Working Group (IFWG).
Recently the IFWG delivered to the TFSA its initial report entitled Making Toronto the North American Centre for Islamic Finance: Challenges and Opportunities (See, www.TFSA.ca). The report provides an overview of Islamic finance activity in Toronto and Canada, identifies tax, regulatory and legal issues that need to be addressed to ensure the growth of Islamic finance in Toronto and Canada. In addition, the report proposes a series of next steps:
- helping members of the Islamic community to network within the conventional Canadian financial system;
- clarifying the regulatory environment relevant to products and services compliant with Islamic commercial law;
- working with the new Centre of Excellence in Financial Services Education to build linkages with other countries where Islamic Finance is well established to facilitate in Toronto educational and awareness building initiatives;
- partnering with Canadian governments to increase the level of foreign direct investment from the Gulf region;
- a series of technical working papers are proposed on the following topics: Education, Retail Markets and Sukuks (Corporate and Sovereign).
The IFWG is now developing a work plan to undertake the activities noted above and is expected to be in a position in the Fall to make further announcements on steps it is taking to advance the objectives described above.