Taxonomy Foundations
Please feel free to answer only the questions that are of the most interest and relevance to you.
1a. The first phase of taxonomy development will focus on climate mitigation. In subsequent phases of the Canadian taxonomy, which objectives should be prioritized? Please select your top choices.
- Other (please specify)
1b. Specify priority
None. There should be no Canadian sustainable finance taxonomy at all, in this phase or any subsequent phase. Prioritizing additional objectives only expands a fundamentally flawed hierarchical system for steering private capital. Please see our attached full comment letter for the detailed free-market critique and recommendation that the draft Methodology Report and any resulting taxonomy be withdrawn.
It is proposed that the design and implementation of the Canadian taxonomy be informed by the following six principles: Credible; usable; interoperable; dynamic; regionally specific; and prioritized.
2a. Do you agree or disagree with these proposed principles as the foundation for the taxonomy?
Strongly disagree
2b. Please share the reason for your answer in the space provided
These principles presuppose the legitimacy of a hierarchical ranking of private capital allocation. From a free-market perspective shared by the Alberta Business Alliance, no such official or quasi-official taxonomy should exist. It substitutes committee judgments for the knowledge and choices of investors and entrepreneurs. Please see our attached formal submission for the full rationale.
Do No Significant Harm and Minimum Social Safeguards
Please feel free to answer only the questions that are of the most interest and relevance to you.
The proposed taxonomy framework for Canada includes a set of Do No Significant Harm (DNSH) criteria and Minimum Social Safeguards (MSS), which will be designed to ensure that climate mitigation objectives do not adversely impact other environmental and social values, or legal rights. It is proposed that issuers must disclose the extent to which they meet specific criteria for both DNSH and MSS in order to claim taxonomy alignment.
4a. Do you agree or disagree with the proposed partial alignment approach, which would require entities to disclose the extent to which DNSH/MSS criteria are or are not met rather than requiring full alignment with all DNSH/MSS criteria?
Strongly disagree
4b. Please explain your answer in the space below
DNSH criteria, however applied, function as a practical veto on new oil and gas development and raise the cost of sustaining existing operations. For Alberta SMEs that operate in or supply the energy sector, this turns guidance into a de facto capital barrier. Minimum social safeguards add further bureaucratic layers without strengthening existing legal protections. See our attached letter for detailed analysis.
5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?
Strongly disagree
5b. Please explain your answer in the space below
The proposed scope of DNSH and MSS objectives is overly broad and expands bureaucratic conditions on private capital allocation far beyond what is necessary. Existing Canadian legislation, constitutional protections, and treaty rights already address genuine environmental and social harms. Embedding additional hierarchical criteria for biodiversity, circular economy, and other open-ended objectives creates new layers of administrative discretion and compliance risk, which is particularly burdensome for Alberta SMEs in or supplying the energy sector, without strengthening enforceable legal protections. Please see our attached formal submission for the full analysis.
6a. Do you agree or disagree with the proposed approach to grounding the DNSH/MSS frameworks in Canadian legislation and going beyond existing laws and standards where necessary?
Strongly disagree
6b. Please explain your answer in the space below
Existing Canadian legislation, constitutional protections, and treaty rights already provide the appropriate legal framework for environmental and social safeguards. Going beyond those laws through a taxonomy creates new layers of administrative discretion and compliance risk without strengthening enforceable protections. This expands bureaucratic conditions on private capital allocation, which is particularly burdensome for Alberta SMEs, and constitutes mission creep rather than improved governance. Please see our attached formal submission for the full analysis.
7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?
None.
8a. Do you agree or disagree that different DNSH/MSS standards should apply to projects or entities of different sizes? E.g. more comprehensive disclosures required for larger projects and/or entities, with more streamlined disclosures for smaller projects and/or entities?
Strongly disagree
8b. Please explain your answer in the space below
Differentiating DNSH/MSS standards by size still embeds a hierarchical taxonomy framework that should not exist. Even “streamlined” requirements for smaller projects or entities create ongoing compliance costs and uncertainty that Alberta SMEs, particularly those operating in or supplying the energy sector, are least able to absorb. Standards should rest on existing law and demonstrable harm, not on bureaucratic tiers that expand technocratic oversight of private capital. Please see our attached formal submission for the full rationale.
9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?
There should be no framework. Please see our attached formal submission for the full rationale.
10. How should the taxonomy operationalize the principles of the UN Declaration on the Rights of Indigenous Peoples and, in particular, the principle of Free, Prior, and Informed Consent, in the MSS framework?
Existing Canadian constitutional protections, treaty rights, and legislation already provide the appropriate Canadian-made legal channels for Indigenous rights and consultation. Embedding additional hierarchical criteria for UNDRIP/FPIC inside a sustainable finance taxonomy creates new layers of administrative discretion and compliance risk without strengthening enforceable legal protections. This expands bureaucratic conditions on private capital allocation, which is particularly burdensome for Alberta SMEs, and again constitutes mission creep rather than improved governance. Indigenous rights should continue to be addressed through established legal and treaty processes, not through a capital-classification system. Please see our attached formal submission for the full analysis.
11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?
There should be no Canadian sustainable finance taxonomy at all, in this phase or any subsequent phase. Prioritizing additional objectives only expands a fundamentally flawed hierarchical system for steering private capital. Please see our attached full comment letter for the detailed free-market critique and recommendation that the draft Methodology Report and any resulting taxonomy be withdrawn.
Section 3: Activity Classification Framework
Please feel free to answer only the questions that are of the most interest and relevance to you.
The activity classification framework proposes that the green category should be limited to activities with zero or near-zero emissions that make a substantial contribution to climate change mitigation or to activities that directly enable zero to near-zero emissions climate solutions (e.g., electric vehicle manufacturing facilities)
12a. Do you agree or disagree with this approach?
Strongly disagree
12b. Please explain your answer in the space below
Hierarchical categories (green, transition, abatement) are arbitrary and distortive. They create artificial winners and losers, politicize capital allocation, and, through DNSH, restrict new hydrocarbon development while constraining reinvestment in existing operations. The narrow abatement category does not solve these problems and leaves Alberta energy-supporting SMEs particularly exposed. Please refer to our attached full comment letter.
The framework proposes that the transition category should include activities that have materially high emissions today but have the potential to decarbonize sufficiently to align with the green definition (i.e., zero to near-zero emissions) by 2050. These activities are likely to experience stable or growing demand in Paris-aligned representative pathways due to a lack of technically feasible low-carbon substitutes (e.g., major decarbonization investments in steel, cement, and chemicals manufacturing).
13a. Do you agree or disagree with this approach?
Strongly disagree
13b. Please explain your answer in the space below
Hierarchical categories (green, transition, abatement) are arbitrary and distortive. They create artificial winners and losers, politicize capital allocation, and, through DNSH, restrict new hydrocarbon development while constraining reinvestment in existing operations. The narrow abatement category does not solve these problems and leaves Alberta energy-supporting SMEs particularly exposed. Please refer to our attached full comment letter.
14a. Do you agree or disagree that the proposed guardrails for the transition category (both for the whole-of-activity and measures pathways) are sufficient to protect the science-based credibility of the category and reduce the risk of carbon lock-in, while supporting usability?
Strongly disagree
14b. Please explain your answer in the space below
Hierarchical categories (green, transition, abatement) are arbitrary and distortive. They create artificial winners and losers, politicize capital allocation, and, through DNSH, restrict new hydrocarbon development while constraining reinvestment in existing operations. The narrow abatement category does not solve these problems and leaves Alberta energy-supporting SMEs particularly exposed. Please refer to our attached full comment letter.
The report proposes that initial research on the abatement measures category should be conducted in 2027 and include select emissions-reduction measures for activities that have high Scope 1 emissions today and are unable to achieve the life cycle emissions reductions necessary to align with Paris-aligned pathways (e.g. major decarbonization investments in the upstream production, refining, and distribution of oil and gas). These are activities that are highly likely to experience declining demand as the world transitions to clean energy and alternative technologies.
15a. Do you agree or disagree that the taxonomy should include a third “abatement” category, as proposed, that covers demand-decline activities?
Strongly disagree (i.e., disagree on fundamentals)
15b. Please explain your answer in the space below
The Alberta Business Alliance opposes inclusion of an “abatement” category. Hierarchical ranking of economic activities, whether labelled green, transition, or abatement, remains a form of central planning of private capital. The abatement category treats oil and gas as a managed-decline sector, and when combined with “Do No Significant Harm” criteria it functions as a practical capital barrier to new development and major reinvestment in existing operations. This is especially damaging for Alberta SMEs that operate in or supply the energy sector. Please see our attached formal submission for the full analysis.
The report proposes an illustrative list of guardrails for the abatement measures category that, if formally developed and finalized, would be designed to prevent carbon lock-in and ensure the abatement measures category remains credible within a Paris-aligned framework. When thinking about the taxonomy’s credibility and usability, please provide feedback on this illustrative list of guardrails.
16. Should any additional guardrails be considered?
The abatement category is not credible or usable from a free-market perspective. The underlying premise, that certain activities must be treated as demand-decline and managed within a Paris-aligned phase-out framework, is rejected. Additional guardrails simply layer further complexity, compliance costs, and administrative discretion onto an already distortive hierarchical system. They do not eliminate the knowledge problem or the risk of politicized capital allocation. The Alberta Business Alliance recommends that the entire taxonomy, including any abatement category and its guardrails, be withdrawn. Please refer to our attached formal letter for the detailed rationale.
17. Is there any other feedback you would like to provide on the proposed activity classification framework?
Please refer to our attached full comment letter.
Section 4: Technical Screening Criteria
Please feel free to answer only the questions that are of the most interest and relevance to you.
18a. Do you agree or disagree with the proposed approach for developing technical screening criteria?
Strongly disagree
18b. Please explain your answer in the space below
Technical screening criteria embed the knowledge problem: no central body can correctly define and update performance thresholds across dynamic markets and technologies. They will lag innovation, raise compliance costs that larger firms may absorb but smaller Alberta businesses cannot, and become politicized.
19. Please rate each of the proposed elements for the screening criteria on a scale from “very important” to “not at all important.”
- Forward-looking wherever possible
- Not at all important
- Include sunset and/or sunrise dates where relevant
- Not at all important
- Revise as necessary during regular review periods
- Not at all important
- Primarily use quantitative metrics
- Not at all important
- Primarily focus on Scope 1 emissions but address Scope 2 and 3 emissions where feasible and/or material
- Not at all important
- Informed by a range of robust methods
- Not at all important
20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?
There should be no technical screening criteria.
21. Do you agree or disagree with the proposed approach of focusing primarily on Scope 1 emissions, and addressing Scope 2 and 3 emissions where feasible and/or material?
From a free-market perspective, the entire exercise of detailed emissions accounting, whether focused on Scope 1 or extended to Scope 2 and 3, represents a costly and largely unproductive compliance burden. Markets already process environmental and technological information through prices, insurance, and voluntary disclosure. Mandating hierarchical Scope accounting, especially Scope 3 (which attributes end-use emissions to producers and invites double-counting and data disputes), embeds political priorities into private commercial decisions and diverts resources from productive activity. This is particularly damaging for smaller firms. The Alberta Business Alliance rejects the premise that official emissions accounting frameworks of this kind improve capital allocation or economic outcomes. Please see our attached formal submission for the full free-enterprise critique.
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Very unsatisfied
23. Is there any other feedback you would like to provide on the methodology report as a whole that has not already been covered?
The Alberta Business Alliance fundamentally opposes the concept of an official or quasi-official green taxonomy. It amounts to central planning of private capital, will raise costs and restrict access to affordable capital for Alberta SMEs (especially those tied to the energy sector), and puts Canada out of step with its most important economic partner, the United States. Our attached formal letter sets out the detailed free-market critique and recommends that the draft Methodology Report and any resulting taxonomy be withdrawn or abandoned.