The Bloc’s fake freakout over halal mortgages is ridiculous

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The Bloc Québécois stands for certain unbending causes, such as the protection of the French language, the safeguarding of Quebec’s jurisdiction and the demand that home purchases be financed only through interest-levying instruments.

That last one was a surprise, because until last week, there was little outward sign of the Bloc’s dedication to preserving the traditional culture of Canadian bankers.

Yet Bloc Leader Yves-François Blanchet and some of his MPs issued dark warnings that three paragraphs in last week’s budget will set Canada – and therefore Quebec – on a slippery slope into sharia law.

This is dumb. Or disingenuous. Probably both.

The budget passage in question indicated that the mandarins of Finance Canada will explore possible ways to expand access to halal mortgages and other “alternative financing products.”

Halal mortgages are vehicles to finance the purchasing of a house that are structured so they don’t involve the paying of interest, which many Muslims consider to be a violation given the religious prohibition of usury.

This was too much for Mr. Blanchet and the Bloc, who joined that strange set of anxious commentators who fret that sharia is lurking just around the corner, waiting to leap out unsuspecting Canadians in the way that the Spanish Inquisition pounced in a Monty Python skit.

“The introduction of an element of sharia in Canada’s legislative regime would be a grave precedent,” Mr. Blanchet said in a statement, which labelled it “a measure contrary to the secular state.”

That is utter nonsense.

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Mr. Blanchet seems to think a secular state must be a secularizing state. A secular state is neutral as to what faith, if any, its citizens practice. A secularizing state tries to impede citizens from practising a faith.

Broadening access to halal mortgages doesn’t require adopting sharia law or any religious element into Canadian law. It might mean tinkering with tax laws or rules around title to property or interpretations of transactions – secular changes to secular laws. They don’t have to force anyone to get a halal mortgage, or have any substantial impact on people who don’t.

Halal mortgages are already available in many countries, including the U.S., Britain, Israel – and Canada. They are no more a threat to the secular state than laws about labelling kosher pickles or Quebec’s statutory Easter holiday.

Still, many people, including MPs, don’t know much about halal mortgages. So it was fair enough when Bloc MP Martin Champoux stood up in the Commons last Thursday to say he didn’t understand why the budget mooted possible regulatory changes. But that made it all the more ridiculous when he then asserted that it means “putting more and more religion into the affairs of state.”

In fact, there’s no mystery as to why the government is considering changes: It’s expensive to buy a home in Canada now, and more expensive with a halal mortgage.

Some Muslims in Canada take out conventional mortgages, but others save to buy a home outright, or keep renting, said Walid Hejazi, a professor of economic analysis and policy at the University of Toronto’s Rotman School of Management who teaches a course in Islamic finance.

A Halal mortgage is structured so money paid for financing is not interest. It still has a cost, but it is paid as profits or rent-like installments: “The process is important,” Prof. Hejazi said in an interview.

Halal mortgages are more expensive because companies that offer them don’t have the same scale and access to capital as big banks, and because they involve transactions that bump up against the technicalities of property and tax regulation.

One type of halal mortgage, for example, essentially involves a finance company buying a home for a purchaser and selling it back to them at a higher price, to be paid over time, so the company earns profits rather than interest. But that create two property transfers to be taxed. Regulatory changes might eliminate such double taxation, Mr. Hejazi said. They won’t bring sharia into Canadian law.

“It has nothing to do with that,” Prof. Hejazi said. “All it is, is eliminating the barriers so that someone who is a Muslim can arrange their financial affairs in a way that is consistent with their faith.”

But Mr. Blanchet and the Bloc apparently saw those three paragraphs and saw them as an easy opportunity to launch a fraudulent freakout – and made themselves ridiculous.