Is there any update on TFSA progress? (Admin IBFN)

Toronto is the financial services capital of Canada and one of North America’s premier financial centres. In 2008, Forbes Magazine listed Toronto as one of the top 10 most economically powerful cities in the world.

Toronto is currently ranked #12 in the Global Financial Centres Index and #3 in North America. The City has a sophisticated cluster of financial services companies, offering a range of quality services and expertise that rank among the best in the World. At the same time, Toronto has one of the most multi-cultural populations of any major city and tremendous capability to innovate within the financial sector.

One of the most rapidly growing segments of the international financial services sector is Islamic finance, i.e., the system of financial activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. 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. At the same time, it has been reported that other Western jurisdictions (Australia, France, Germany, Italy) are exploring the prospects of attracting Islamic financial activity.

As a testament to the importance of the financial sector, in 2001, 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 the creation of an Islamic Finance Working Group (IFWG) has been endorsed to scope out the possibilities in this growing arena.

Set out below is the initial report of the IFWG on public policy issues that are relevant to promoting the development of an Islamic financial sector in Toronto. The report provides a summary of existing as well as past Islamic finance activity in Toronto, identifies tax, regulatory and legal issues that need to be addressed to ensure the growth of Islamic finance in Toronto and Canada and outlines some recommended next steps as follows:

help members of the Islamic community to network • within the conventional Canadian financial system;
clarify the regulatory environment relevant to products • and services compliant with Islamic commercial law;
work 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;
partner with Canadian governments to increase the level • of foreign direct investment from the Gulf region; and
prepare and issue a series of technical working papers • on the following topics: Education, Retail Markets and Sukuks (Corporate and Sovereign).

The IFWG is optimistic that if the proposed next steps are undertaken, it will be possible to position Toronto to become the centre for Islamic Finance in North America.