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.

• Climate change adaptation / resilience
• Protection of biodiversity and healthy ecosystems

2a. Do you agree or disagree with these proposed principles as the foundation for the taxonomy?

Neutral

2b. Please share the reason for your answer in the space provided

The proposed principles have merit, especially the emphasis on credibility. However, the taxonomy would undermine those principles if it creates an abatement measures category that accommodates the fossil fuel sector. Canada’s taxonomy is meant to identify green and transition investments using science-based criteria aligned with net-zero by 2050 and limiting warming to 1.5°C. Labelling oil and gas abatement as taxonomy-aligned would drift from that mandate and risk weakening the taxonomy’s credibility with investors and the public.
DSF acknowledges the distinct circumstances of northern, rural, remote and Indigenous communities, but regional flexibility must not mean lower climate, environmental or social standards. Fossil fuel dependence in these communities often contributes to high energy costs, unreliable service and environmental harm. These communities would benefit more from investment in clean electricity, electrification and transmission than from measures that prolong fossil fuel infrastructure. Any alternative pathways for demonstrating alignment must still meet strong sustainability requirements, technical screening criteria and minimum social safeguards. In particular, economic or technical constraints must never be used to justify weaker protections for Indigenous rights or to bypass free, prior and informed consent where it applies. Overall, the principles can support a credible taxonomy only if they are applied in a way that excludes fossil fuel lock-in and accelerates a fair energy transition.

3. Please rate each of the principles below on a scale from “very important” to “not at all important.”

Credible

Very important

Usable

Very important

Interoperable

Important

Dynamic

Very important

Regionally Specific

Not that important

Prioritized

Important

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?

Disagree

4b. Please explain your answer in the space below

Full alignment with DNSH and MSS criteria should be required for any activity to qualify as taxonomy-aligned, consistent with the EU taxonomy’s binary approach and the approach originally proposed in Canada’s 2022 Taxonomy Roadmap Report. Failure to meet any DNSH or MSS requirement would prevent an activity from receiving taxonomy-aligned status. Companies could be given a short grace period to address non-compliance, develop due diligence processes and remedy harm, but full compliance should remain a condition of eligibility. The proposed partial alignment approach would weaken the taxonomy by allowing projects to receive a sustainability designation even if they fail to meet criteria related to issues such as biodiversity protection or Indigenous rights. Voluntary self-assessment and disclosure are unlikely to drive meaningful corporate change without strong requirements and enforcement. Most importantly, partial alignment risks treating respect for Indigenous rights as optional rather than mandatory. This would leave Indigenous communities to bear the burden of addressing rights violations while projects that fail to uphold those rights could still benefit from a sustainability label.

5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?

Strongly agree

5b. Please explain your answer in the space below

The proposed objectives covered in Canada’s DNSH framework include climate change adaptation, protection of biodiversity and healthy ecosystems, water conservation, pollution prevention and control, and circular economy. The proposed objectives covered in Canada’s MSS framework include Indigenous rights, human rights, labour standards, corruption and bribery controls, and taxation integrity. The David Suzuki Foundations notes that each of these objectives is important to the taxonomy’s integrity and should be treated as essential to determining whether an activity is genuinely sustainable.

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?

Agree

6b. Please explain your answer in the space below

The MSS framework should be grounded in Canadian legislation, including the Constitution Act, 1982, the UNDRIP Act, and DRIPA, while also recognizing the need to go beyond existing laws and standards where they fall short of the minimum standards established by the UN Declaration. Canadian companies should already be complying with domestic environmental and human rights law, and the DNSH/MSS framework should encourage both companies and investors to meet international best-practice standards. The goal of the taxonomy has always been to set a “high standard” for what counts as sustainable, going beyond current practice to support the goal of reaching net-zero emissions by 2050 (Department of Finance Canada, 2024). Adoption of international criteria should also reflect Canada’s strong historical involvement in developing international declarations and principles. To align with the Paris Agreement, the Canadian taxonomy should recognize the importance of climate justice, human rights and equality, intergenerational equity, just transition, and food security. Canada’s taxonomy should also align with other taxonomies, including the EU and Australian taxonomies, in their use of international standards in the DNSH/MSS frameworks.

7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?

Canada has a responsibility to bring its laws, policies and standards into alignment with the United Nations Declaration on the Rights of Indigenous Peoples. Canadian legislation, including the UNDRIP Act and DRIPA, establishes a framework for this work and confirms that existing laws and standards do not yet fully meet the protections and principles affirmed in the UN Declaration. For the MSS framework to meaningfully uphold Indigenous rights, it must therefore go beyond existing national laws and standards where necessary to meet the minimum standards set by the UN Declaration. The UN Declaration represents a minimum standard and is an appropriate benchmark for the MSS framework.
Similarly, in relation to nature and biodiversity, Canadian laws do not always fully reflect evolving scientific evidence or international commitments, including the findings of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, the Kunming-Montreal Global Biodiversity Framework, Canada’s Nature Strategy, and Quebec’s Nature Plan. DNSH criteria should help address these gaps by considering cumulative impacts, ecosystem connectivity, and alignment with internationally recognized frameworks such as the TNFD.

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?

Agree

8b. Please explain your answer in the space below

Differentiated disclosure requirements can reflect entity size and operating context, but they should also account for the scale of an activity’s social and environmental impacts. Smaller entities may need guidance, support and flexibility in demonstrating compliance, but not lower standards or exemptions from relevant DNSH/MSS criteria.
This matters in Canada, where small and medium-sized enterprises make up nearly all employer businesses. Reporting can be streamlined by size, activity and sector, especially where impacts are lower. However, activities with greater potential to affect Indigenous territories, resources, self-determination or other rights should face stronger requirements. Any simplified reporting should be temporary, tied to a clear timeline for full compliance, and provide easier tools—not exemptions from environmental or social responsibility.

9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?

The framework should adopt a binary approach with a grace period for compliance, since allowing taxonomy-alignment where an entity merely discloses unmet DNSH or MSS criteria risks certifying "green" projects that cause significant environmental or social harm. Genuine environmental sustainability also requires operationalizing Indigenous rights, including UNDRIP principles and FPIC, so that alignment reflects the rights, laws, and knowledge systems of Indigenous Peoples with longstanding relationships to the land and water in question. Without this, the taxonomy risks directing capital toward projects that undermine Indigenous rights, territorial relationships, and unresolved title and jurisdictional questions.

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?

While we defer to Indigenous Nations and organizations on the particulars on this matter, we believe Canada's sustainable finance taxonomy must recognize that respecting Indigenous rights is an essential component of long-term environmental sustainability, not merely an optional social safeguard.

To ensure its credibility, and to avoid violating Indigenous rights the taxonomy’s Minimum Social Safeguards (MSS) must include specific, mandatory criteria grounded in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). Economic activities should only receive taxonomy alignment if they demonstrate strict adherence to these principles, including securing Free, Prior, and Informed Consent (FPIC) wherever required by UNDRIP rather than just domestic law.

Taxonomy users must provide credible evidence of meaningful Indigenous participation, proving that correctly identified rights-holders were engaged at the earliest planning stages and given sufficient time for decision-making through their own governance institutions. Furthermore, consent must be treated as an ongoing requirement that can be withdrawn or renegotiated if project circumstances materially change. To ensure accountability, the taxonomy must require independent and rights-holder verification rather than relying exclusively on corporate self-reporting. Affected communities must also have accessible, meaningful mechanisms to challenge compliance claims and seek review if disagreements arise. Crucially, the taxonomy must establish strict "red flag" exclusions that automatically disqualify non-compliant activities from receiving a sustainable designation. These exclusions must apply to any project that violates constitutionally protected Aboriginal or Treaty rights, proceeds over unresolved Indigenous objections, ignores Indigenous legal orders, or fails to respect FPIC. Ultimately, operationalizing these requirements protects both investors and Indigenous communities by reducing legal uncertainty, supporting reconciliation, and ensuring Canada remains a credible leader in responsible sustainable finance.

12a. Do you agree or disagree with this approach?

Neutral

12b. Please explain your answer in the space below

The Methodology Report requires green-category activities to be either (1) zero to near-zero emissions solutions like renewables and EVs, or (2) enabling activities whose direct output is zero to near-zero, like EV manufacturing plants. Enabling activities get extra guardrails to keep them aligned with the green category's ambition.

That's a strong definition on paper. But it falls apart without a hard fossil-fuel exclusion. The Methodology Report says "natural gas use will be considered where relevant in prioritized sectors, such as electricity, manufacturing, and transportation sector guidance." Read plainly, that means gas could still qualify as green or transition in key sectors. The David Suzuki Foundation rejects such interpretation. We advocate for excluding all fossil fuels from both the green and transition categories, full stop. Both the IEA and IPCC agree: a 1.5°C pathway leaves no room for new fossil fuel supply. The IEA's own Net Zero Scenario says gas-fired generation peaks in the mid-2020s, then declines for good. Letting oil and gas into the green or transition categories invites the same greenwashing seen in other jurisdictions, and it locks in carbon by pulling capital away from real green and transition activities toward oil and gas instead. Canada's oil and gas sector has been recording record profits, but has failed to invest in mitigation.

Compare this to Australia's taxonomy, which excludes fossil fuels from green activities almost entirely. Electricity systems running on 90 per cent or more renewables can use fossil fuels for back-up only, and only if they can show a plan to phase them out by January 2030. Buildings can't use fossil fuels for normal operations at all — the one exception is standby power, and only for buildings that already meet every other green criterion. Removing fossil fuel dependency is treated as the core decarbonization lever for buildings, not a footnote. Canada's technical screening criteria should match this level of precision.
We also recommend, at a minimum, requiring transition plans within a set timeframe after a company receives taxonomy financing. The Methodology Report currently drops this requirement, on the theory that skipping it will speed uptake. That's a step back from the 2022 Taxonomy Roadmap, which called for a preliminary net-zero transition plan within 12 months and a full science-based plan within 24. A firm deadline lets companies access financing fast while still producing a credible plan — it doesn't have to be one or the other.

Canada risks falling behind without this. Other jurisdictions with taxonomies, notably Australia and the EU are already moving on transition plans. The UK picked transition plans over a taxonomy entirely. Given Canada already lags on climate disclosure, to keep up with our trading partners, both the taxonomy and transition planning need to be priorities — not one traded off against the other.

13a. Do you agree or disagree with this approach?

Agree

13b. Please explain your answer in the space below

A key strength of the definition is that it “would not include activities related to oil and gas production” (Methodology Report, page 25). Another strength is that it includes activities that “have the potential to decarbonize sufficiently to align with the green definition (i.e., zero to near-zero emissions) by mid-century” and with stable or growing demand in Paris-aligned pathways, such as steel, cement, and chemicals manufacturing (Methodology Report, page 29).

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?

Neutral

14b. Please explain your answer in the space below

DSF recommends entity-level guardrails for both the whole-of-activity and transition measures pathways, ensuring eligible activities and facilities do not enable the production of or prolong the use of fossil fuel-based energy, including LNG. DSF opposes counting fuel switching to lower-carbon fuels derived from waste and plastics as a transition measure, since burning such fuels can release toxic substances including mercury, dioxins, cadmium, sulphur, and lead, undermining waste reduction goals. Instead, fuel switching should be defined as switching from fossil to non-fossil alternatives, as in the Australian taxonomy, limited to liquid or gaseous biofuels from agricultural residues and wastewater — excluding corn-based and other virgin crop-based ethanol. Sustainable aviation fuel may be the sole exception where non-waste feedstock is used, given its status as best available technology per the Corporate Knights Sustainable Economy Taxonomy.

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 David Suzuki Foundation strongly recommends that the proposed abatement measures category be excluded from Canada's sustainable finance taxonomy, including any eligibility for oil and gas activities. A credible taxonomy should provide clear, science-based guidance to investors about activities compatible with a Paris-aligned transition. A dedicated label for oil and gas abatement would weaken that purpose by directing sustainable finance toward activities whose core business model remains fundamentally misaligned with a 1.5°C pathway, and toward a sector that has repeatedly sought to delay climate action, undermine climate policy, weaken renewable energy and electrification, and lock in fossil fuel infrastructure.

DSF acknowledges the urgent need to reduce operational emissions from oil and gas, but disagrees strenuously that the taxonomy is the appropriate mechanism to do so. For over a decade, DSF has supported stronger methane regulations, industrial carbon pricing, clean electricity regulations and other binding measures to drive emissions reductions from fossil fuel production, processing, transportation and use. The issue is not whether upstream emissions matter; it is whether a voluntary sustainable finance label is the appropriate instrument for addressing them. It is not. Regulations can set mandatory standards, strengthen over time and be enforced. A taxonomy can only confer credibility and channel preferential capital toward labelled activities, relying on guardrails to prevent that capital from extending fossil fuel production.

The discussion paper's own framing illustrates the problem. It describes abatement measures as short-term emissions-reduction investments in activities expected to decline in Paris-aligned pathways, while acknowledging the need for guardrails against carbon lock-in, greenwashing, asset-life extension and stranded assets. An activity that requires this many caveats to avoid undermining the taxonomy's purpose is not a credible candidate for a sustainable finance label. In practice, capital spent reducing the emissions intensity of extraction can extend the operating life and competitiveness of fossil fuel assets, delaying the decline required as demand falls.

The proposed guardrails do not resolve this. They focus on activity-level emissions reductions while failing to address downstream combustion emissions, which make up the vast majority of the sector's climate impact. A producer could qualify for taxonomy-labelled financing for an abatement project while continuing to expand production, lobby against climate policy or delay transition planning. To date, no major Canadian oil and gas company has acknowledged the need for a managed decline in production consistent with climate science, or deployed its capital accordingly.

The guardrails proposed for the abatement category would also be difficult to apply. Distinguishing existing from new oil and gas infrastructure is not straightforward, since production systems typically expand through incremental additions, debottlenecking and life-extension investments. Nor is it clear how eligibility could be limited to measures that don't extend fossil fuel asset life, particularly where CCUS has been shown to prolong fossil fuel operations. The only reliable guardrail that can protect the taxonomy's integrity is exclusion of oil and gas activities altogether.

The abatement category is also misaligned with scientific pathways to net zero. Global analysis from the IEA and IPCC shows that oil and gas production and consumption must decline sharply to limit warming in line with the Paris Agreement (IEA, 2021; IPCC, 2022; IPCC, 2023). A taxonomy grounded in climate science should support that phase-down, not legitimize continued investment in fossil fuel production and distribution.

The technologies likely included under an abatement category do not justify a sustainability label. CCUS projects have often underperformed projected capture rates and have frequently supported enhanced oil recovery rather than climate mitigation. Pembina has documented that the "grand bargain" combining the Pathways CCS project and a west coast pipeline will result in a net increase in emissions. CCUS cannot realistically sequester more than a small fraction of emissions from Canada's energy sector, and even this requires substantial subsidies, energy and material inputs. The IEA recommends early retirement of older fossil fuel facilities over CCUS retrofits in advanced economies like Canada (IEA, 2020), and the IPCC identifies CCUS as among the least feasible and most expensive mitigation options (IPCC, 2023).

There is also no demonstrated need for a separate abatement label. The taxonomy does not prohibit investment in any sector. Oil and gas companies already access private capital and, despite Canada's commitment to eliminate fossil fuel subsidies, continue to benefit from substantial public support for technologies such as CCUS. Canada's largest oilsands producers have remained highly profitable while returning substantial free cash flow to shareholders and failing to invest in decarbonization at the scale implied by their climate pledges (Pembina Institute, 2022; Pembina Institute, 2024). A voluntary taxonomy should not provide an additional credibility label for marginal emissions reductions in a sector whose transition plans remain inadequate.

Including oil and gas abatement measures would heighten the risk of greenwashing. Companies could make future-facing decarbonization commitments, attract preferential capital and then fail to deliver. Several major Canadian producers have announced net-zero commitments without credible plans, and have since weakened or withdrawn them. The Oil Sands Alliance's carbon capture proposal has received public support even as its emissions-reduction ambition has been substantially reduced over time. Without binding oversight, there is no reliable safeguard against misuse of an abatement label.

Emissions reductions in oil and gas are more appropriately achieved through binding public policy: industrial carbon pricing, an emissions cap, strengthened methane regulations, clean electricity regulations and removal of all federal or provincial subsidies. International precedent supports a fossil-fuel-free approach: Australia has shown that a major fossil fuel-producing country can develop a taxonomy that excludes fossil fuel activities (Kelly, 2026). The EU's experience, where including natural gas generated controversy and litigation despite eligibility criteria, should be a cautionary tale, not a model.

For these reasons, DSF recommends removing the abatement measures category from the Canadian taxonomy. Oil and gas activities should not be eligible for a green, transition or abatement label. The taxonomy's integrity depends on excluding activities that risk carbon lock-in, and directing sustainable finance toward activities genuinely compatible with a Paris-aligned transition.

16. Should any additional guardrails be considered?

No additional guardrails can fix a category that is fundamentally misaligned with climate science.

As the current, extensive list of proposed caveats already demonstrates, attempting to regulate oil and gas investments within a sustainable finance label inevitably leads to loopholes, greenwashing, and carbon lock-in. It is impossible to design practical, enforceable guardrails that perfectly isolate "abatement" from "asset-life extension," nor can activity-level rules account for a company's overall production expansion or its downstream combustion emissions.

Adding more rules to a fundamentally incompatible category will not solve the problem. The only definitive, effective safeguard to preserve the scientific integrity of the Canadian taxonomy is the complete and categorical exclusion of the oil and gas sector.

17. Is there any other feedback you would like to provide on the proposed activity classification framework?

The taxonomy was mandated to be a science-based gold standard for sustainable economic activity in Canada, grounded in baselines like the IPCC's 2022 Mitigation Pathways and the IEA's 2021 Net Zero by 2050. Carving out a third, abatement category would defeat the taxonomy's purpose. The David Suzuki Foundation believes the abatement category should be cut outright: it doesn't just compromise credibility, it makes the taxonomy less usable.

18a. Do you agree or disagree with the proposed approach for developing technical screening criteria?

Agree

18b. Please explain your answer in the space below

We agree technical screening criteria should be developed via engagement with Indigenous-led organizations, technical experts, academics, industry representatives, and international advisory groups.

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

Very important

Include sunset and/or sunrise dates where relevant

Very important

Revise as necessary during regular review periods

Very important

Primarily use quantitative metrics

Very important

Primarily focus on Scope 1 emissions but address Scope 2 and 3 emissions where feasible and/or material

Very important

Informed by a range of robust methods

Very important

20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?

The taxonomy should be similarly specific and prescriptive as the Australian taxonomy, which relies on performance-based standards for emissions intensity as well as prescriptive definitions of what does or does not count (e.g. buildings sector exclusion of all combustion of fossil fuels for normal on-site operations, specific list of eligible technologies that count as transition measures). It also relies on external standards for products (e.g. energy labels, buildings ratings).

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?

DSF would encourage the Council to address Scope 2 and 3 emissions expeditiously, as these are frequently higher and more material to global emissions than Scope 1 emissions. For many sectors covered by the taxonomy's green and transition categories, limiting technical screening criteria to Scope 1 emissions would understate an activity's true climate impact and risk certifying investments that look sustainable on a narrow accounting basis but are not sustainable in aggregate. For activities that remain properly within the taxonomy's scope, the Methodology Report notes that other jurisdictions have formulated technical screening criteria to address Scope 2 and 3 emissions where these represent the majority of an industry's footprint. The Canadian taxonomy should build on these existing best practices, and should treat comprehensive scope coverage as a baseline requirement for credibility rather than an aspirational add-on.

22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?

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 David Suzuki Foundation recognizes the substantial work that has gone into developing the taxonomy. As noted, there is much we support. We are not satisfied with the proposed inclusion of an abatement measures category. Furthermore, we believe the taxonomy should take as a core principle that it must advance genuine transition pathways and emissions reductions by identifying which economic activities directly reduce Canada's emissions in line with net-zero and hence encouraging capital investment accordingly.