From: The Encyclopedia of Canada's Peoples/Icelanders/Anne Brydon
In Iceland every citizen is born into the state Evangelical Lutheran Church; baptism is both a religious and an official means of naming a child. Should a person seek another faith or prefer to have no religion at all, he or she must officially resign from the church. Therefore all early immigrants to Canada were Lutherans. Although Iceland had no religious factionalism – Lutheranism was the only permitted religion until the late 1800s – a dispute ostensibly on doctrinal issues arose in the settlement of New Iceland in March 1878. It involved the selection of a pastor, although the ensuing public furore soon enveloped other issues in the community. Public meetings continued throughout the winter of 1877–78 and ended only when one of the protagonists left for North Dakota together with about half a dozen families from Gimli.
Although some historians present the conflict as theological – Páll Thorláksson was from the strict Norwegian synod, whereas Jón Bjarnason was from the more liberal theological seminary in Iceland – others argue that more was at stake. Cost was a factor, since many in New Iceland were poor and Thorláksson had offered his services for free. He also favoured closer association with Norwegian settlements in the United States, an arrangement that appealed to those who believed New Iceland was doomed to failure. As well, some felt that in order to succeed, Icelanders should be willing to adapt new ways and become good citizens of their new country. On the other hand, Bjarnason’s ties with Iceland were considered beneficial to those interested in maintaining their language and culture. Thus the dispute was fundamentally about attitudes to New Iceland, issues of cultural survival and economic viability, and the quality of leadership that these men offered. Today church attendance among Icelandic Canadians is consistent with the profile for the country as a whole; it is not high, nor are religious beliefs a strong part of ethnic identity.
A significant, but unknown number of Icelandic Canadians are Unitarians. The Unitarian-Universalist movement dates back to the late 1700s and emphasizes a rationalist philosophy that denies the concepts of the Trinity, original sin, and eternal punishment, and views God as singular. In 1891, influenced by the Norwegian Unitarian preacher Kristofer Janson, whom he had met in Minneapolis, Björn Pétursson broke away from Lutheranism and along with thirty-six others, founded a Unitarian church in Winnipeg. Ten years later the United Conference of Icelandic Churches of North America was established, and in its heyday it consisted of eight mostly rural churches, twelve preaching stations, and 600 members in Manitoba and what is now Saskatchewan. Services seem to have been primarily in Icelandic, and until about 1950, church by-laws were also in that language. The churches began to close or merge with others from the 1940s onward. Arborg in Manitoba had the last Icelandic Unitarian church in the 1970s. Now members of the community who are Unitarians attend mainstream churches.
Early in the twentieth century, spiritualist practices from Europe and North America in the form of seances, card and palm reading, and astrology appeared in Iceland. A tendency to equate such customs with a persistence of non-Christian beliefs after Icelanders’ conversion in the year 1000 obscures the differences and conscious breaks that have occurred, as well as the continuities of these so-called pagan practices with those in other countries. Moreover, Christianity does not preclude belief in ghosts, precognition, visions, and other psychic phenomena. A nationwide survey into such beliefs during the 1970s found that psychic dreams were the most prevalent form, with women more than men reporting pre-knowledge of deaths. As well, seeing or feeling the presence of the dead was frequently reported. A comparable survey in Canada has not been conducted, but oral tradition shows that dream interpretation continues among some Icelandic Canadians.