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
• Other (please specify)

1b. Specify priority

Adaptation and resilience warrant priority because physical climate risks are already material to lending, insurance, infrastructure and institutional-investment decisions, yet Canada lacks a common classification for resilience expenditures. Biodiversity, ecosystems and water should be developed concurrently because these objectives are closely interconnected with resilience. Pollution prevention and circular economy can follow as standalone taxonomy objectives; nonetheless, potential significant harm to all other environmental objectives should be assessed and disclosed from the outset through the DNSH framework.

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

Agree

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

The principles provide a sound foundation, but describing them as considerations to be balanced leaves unresolved which principle prevails when usability, interoperability or regional flexibility conflicts with environmental integrity.

Credibility should therefore operate as a non-negotiable floor encompassing scientific robustness, DNSH and MSS, transparency, verifiability and claims integrity. The remaining principles should operate within that floor.

Interoperability should mean transparent comparison and mapping—not automatic equivalence with another taxonomy—and regional criteria should remain subject to a common national ambition threshold. The dynamic principle should be supported by transparent review and version-control processes, including advance notice, effective dates and proportionate arrangements for applying updated criteria to existing and new financing.

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

Credible

Very important

Usable

Important

Interoperable

Important

Dynamic

Important

Regionally Specific

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?

Neutral

4b. Please explain your answer in the space below

Our position:
The methodology should recognize two transparent levels—full and partial DNSH/MSS alignment. Full alignment should be reserved for activities satisfying the substantial-contribution TSC and all applicable DNSH and MSS criteria. Partial alignment should be available only where the applicable legal baseline is met, should receive less recognition, and should be excluded from full-alignment metrics.

Rationale and proposed action:
Partial alignment with DNSH and MSS can broaden market participation, reveal specific safeguard gaps and encourage progressive improvement. However, without clear differentiation, it may increase greenwashing risk, reduce comparability and weaken incentives to satisfy all safeguards. The methodology should establish two transparent levels of recognition: full DNSH/MSS alignment, where all applicable criteria are satisfied, and partial DNSH/MSS alignment, where the applicable legal baseline is met but one or more additional criteria are unmet or insufficiently evidenced. Reserving full alignment for activities satisfying all applicable safeguards would also support interoperability with leading international taxonomies that treat DNSH and MSS as conditions for alignment. Partial alignment should receive less recognition than full alignment. The status of each criterion -met, unmet, unverified or inapplicable- should be disclosed to maintain comparability and limit greenwashing risk.

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

Agree

5b. Please explain your answer in the space below

Our position:
The taxonomy should retain the proposed environmental and social domains. It should also capture material harms that may otherwise fall outside the broad headings.

Rationale and proposed action:
The proposed environmental and social domains provide a sound foundation, but their scope should expressly encompass material life-cycle, indirect and cumulative impacts, including supply-chain harms.

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

Applicable Canadian laws and rights should provide the mandatory baseline, with additional taxonomy requirements where necessary to prevent significant harm or protect fundamental rights.

Rationale and proposed action
Grounding the DNSH and MSS frameworks in Canadian law would provide an appropriate and practical domestic baseline. However, legal compliance should not prevent the taxonomy from imposing higher requirements where existing laws do not adequately prevent significant harm or protect fundamental rights. Requirements exceeding the legal baseline should be clearly justified, proportionate and supported by authoritative standards.

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

Our position:
Yes. Higher requirements could be warranted in targeted areas where existing laws and standards may not adequately address forward-looking, cumulative, value-chain or rights-related harms, provided that those additional requirements are clearly justified and proportionate.

Rationale and proposed action:
Priority areas should include climate resilience and the prevention of maladaptation; material cumulative impacts on biodiversity, water resources and pollution levels; and Indigenous rights, including FPIC where applicable, and cultural heritage. Nonetheless, requirements exceeding existing laws and standards should be introduced only where an identified gap leaves material harm insufficiently addressed, and should be clearly justified and proportionate.

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

Our position:
Our position:
Assessment, disclosure and assurance requirements should be proportionate to project or entity size, capacity, and the likelihood and severity of potential impacts. Smaller or lower-risk projects and entities should benefit from streamlined requirements, while applicable legal requirements and common minimum safeguards should apply regardless of size.

Rationale and proposed action:
Proportionality would improve usability and prevent compliance costs from unduly excluding smaller projects and entities. The methodology should permit streamlined questionnaires, standardized templates, equivalent forms of evidence and proportionate disclosure, monitoring and assurance requirements. However, size should not be the sole determinant. The nature and location of the activity, and the likelihood and severity of its potential environmental, social or rights-related impacts, should determine the required level of scrutiny. Applicable legal requirements and non-waivable safeguards should apply regardless of size, and smaller projects presenting higher risks should remain subject to more comprehensive assessment.

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

The framework should clarify when material life-cycle, indirect, and cumulative impacts must be assessed; how activity-level DNSH and entity- and project-level MSS findings combine in determining alignment; and how unavailable, incomplete, or inconclusive evidence affects the result. With regards to indigenous rights, grievance and remedy expectations should also be clarified. In addition, material incidents, changed conditions, or safeguard breaches should trigger reassessment and, where appropriate, the discontinuation or correction of alignment claims that are no longer supported.

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?

The Indigenous-rights MSS should be developed in close collaboration with First Nations, Inuit and Métis rights-holders. It should also establish common minimum requirements and clear eligibility consequences that can be applied consistently by taxonomy users.

The framework should establish common minimum requirements for: identifying affected Indigenous rights-holders and material impacts; early, free, informed and adequately resourced engagement through recognized representative processes; documenting the status of FPIC where applicable, including material conditions or outstanding objections; protecting confidentiality and Indigenous data governance; and providing access to grievance and remedy.

The entity or project seeking taxonomy alignment should provide sufficient evidence that the applicable Indigenous-rights and FPIC requirements have been addressed, while taxonomy users and assurance providers should assess that evidence against the prescribed MSS criteria. A material unmet requirement, or an unresolved condition that prevents compliance from being demonstrated, should preclude full taxonomy alignment.

The framework should specify proportionate documentation requirements and defined triggers for reassessment following material changes. Consultation, benefits agreements, Indigenous ownership or other forms of participation may constitute relevant evidence, but should not automatically be treated as substitutes for FPIC where consent is required. The core Indigenous-rights and FPIC requirements should be developed in close collaboration with First Nations, Inuit and Métis rights-holders, with detailed implementation and evidentiary guidance informed by meaningful rights-holder engagement.

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

Agree

12b. Please explain your answer in the space below

The taxonomy should reserve the green category for activities already meeting zero-to-near-zero criteria and for clearly defined activities that directly enable zero-to-near-zero climate solutions.

A narrow green category would provide lenders and investors with a high-confidence signal distinct from the execution risks associated with transition activities.

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

Agree

13b. Please explain your answer in the space below

The transition category appropriately distinguishes hard-to-abate activities from those that are already green and from activities expected to decline in a Paris-aligned economy.

Transition status should be time-bound and reassessed as technologies, substitutes and underlying pathway assumptions evolve. Activity-level transition alignment should remain distinct from the transition credibility of the entity as a whole.

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?

Agree

15a. Do you agree or disagree that the taxonomy should include a third “abatement” category, as proposed, that covers demand-decline activities?

Neutral

15b. Please explain your answer in the space below

Our position:
Insufficient information to conclude. A separate abatement-measures category could improve transparency and support material near- to medium-term emissions reductions from demand-decline activities without misclassifying those activities as green or transition. However, the category should not be adopted until its incremental aggregate climate benefit, eligible investment volume and ability to operate without unacceptable integrity risks have been demonstrated.

Rationale and proposed action:
A distinct abatement category has a legitimate conceptual purpose. Certain demand-decline activities cannot achieve the taxonomy’s required long-term life-cycle emissions end-state, yet specific measures may materially reduce emissions while those activities remain in operation. Recognizing such measures separately may therefore support near-term mitigation while preserving the distinction between activities capable of reaching a net-zero-compatible end-state and those that must ultimately decline. It may also provide greater market transparency than either excluding material abatement altogether or treating such investments as transition activities.
The principal advantage of the category is that it could direct capital toward verified, ring-fenced emissions reductions without implying that the underlying activity itself is on a transition pathway. This may be relevant for potential measures such as methane abatement, electrification, flaring reduction and, where technically and economically justified, carbon capture and storage.
These potential benefits must, however, be weighed against material integrity risks. Abatement investments may extend asset lives, improve the economics of activities that should decline, facilitate continued or expanded production, or reduce emissions intensity while absolute or life-cycle emissions remain inconsistent with the required pathway. A taxonomy designation may also be interpreted as endorsement of the underlying asset, activity, issuer or portfolio, creating transition-washing risk. These risks do not necessarily preclude a separate category, but they increase the burden of demonstrating that it would make a sufficiently material climate contribution to justify its introduction.
There is therefore an unresolved question as to whether the category would generate sufficient additional aggregate emissions reductions to warrant a distinct taxonomy classification and associated financing signal. The existence of technically feasible abatement opportunities is not, by itself, sufficient. Some significant near-term reductions may already be required by regulation, commercially advantageous or supported through existing policy, while other potentially material technologies may not yet be deployable at sufficient scale. The relevant test is not the gross emissions-reduction potential of demand-decline sectors, but the volume of material, financeable and additional abatement that taxonomy recognition would reasonably help mobilize beyond regulatory requirements and business-as-usual investment.
Before adopting the category, an exercise be should undertaken to quantify the potential benefits of a dedicated abatement category. The assessment should identify the proposed whitelist of measures; expected eligible investment volumes; annual and cumulative absolute emissions reductions; the portion already required by regulation or expected under business-as-usual; the incremental reductions reasonably attributable to taxonomy-enabled financing; and the category’s contribution relative to Canada’s climate targets and other green and transition investment needs. The assessment should also test whether the category can operate without creating unacceptable lock-in, stranded-asset or claims-integrity risks.
The results should determine whether the incremental climate benefit is sufficiently material to justify the additional complexity and integrity risks associated with establishing a third category. The complete category, including its guardrails and claims framework, should then be subject to separate consultation before implementation.

16. Should any additional guardrails be considered?

Our position:
If, following the above proposed assessment of benefits, the category proceeds (see our comments in question 15b), the proposed guardrails should operate as mandatory eligibility conditions and be supplemented by requirements addressing activity expansion, additionality, absolute emissions, measurement and verification, reassessment, and claims.

Rationale and proposed action:
The proposed guardrails provide an appropriate starting point. Limiting eligibility to existing assets; preventing extension of asset life; requiring significant Scope 1, Scope 2 and upstream Scope 3 emissions reductions; establishing decommissioning or sunset timelines; requiring accompanying investment in low-carbon alternatives; and requiring entity-level transition plans all respond to material risks inherent in financing emissions reductions in activities expected to decline. The methodology report appropriately recognizes that these safeguards require further development and are not exhaustive.

Several additional or strengthened guardrails could also be helpful:
First, activity expansion should be expressly prohibited. An eligible measure should not increase production capacity or throughput, enable development of new assets or reserves, or otherwise facilitate expansion of the underlying demand-decline activity. This should be separate from the prohibition on extending asset life: an investment can increase production without formally extending an asset’s operating period.
Second, eligibility should include an absolute-emissions test alongside any emissions-intensity threshold. A measure should not qualify merely because emissions per unit of output decline if increased production causes absolute emissions to increase.
Third, a regulatory-baseline or additionality test (beyond legal or regulatory baselines) should be established. Taxonomy recognition should identify material climate contributions rather than automatically classify expenditures required to comply with existing law or ordinary business-as-usual investment. Where regulatory requirements establish a minimum performance level, taxonomy eligibility should generally require performance demonstrably beyond that baseline or another clearly substantiated incremental climate contribution.
Fourth, emissions reductions should be measured against a credible and consistently defined baseline and independently verifiable. The methodology should specify acceptable counterfactuals, boundaries, time horizons and treatment of material Scope 2 and Scope 3 effects. Expected reductions should be verified after implementation, with ongoing monitoring where performance can materially change.
Fifth, decommissioning and transition-plan requirements should be sufficiently concrete to be enforceable. Retirement dates should be consistent with credible climate pathways and supported by credible decommissioning arrangements rather than aspirational commitments. Entity-level transition plans should demonstrate consistency between the eligible measure, capital expenditure plans, production expectations and the required decline of the underlying activity.
Sixth, eligibility should be subject to continuing reassessment. Material underperformance, increased production, extension of asset life, failure to meet a required retirement date or other breach of the applicable guardrails should trigger reassessment and, where alignment is no longer supported, discontinuation or correction of the claim. In addition, where a change to the process becomes required by law or regulation, the associated abatement should become ineligible, as it would not be additional anymore to existing legal requirements.
Finally, claims should remain strictly bounded to the eligible measure. Abatement classification should not imply that the underlying activity, asset, entity or portfolio is itself aligned with a net-zero end-state. Instrument- and portfolio-level disclosures should clearly distinguish the amount financing the eligible measure from exposure to the underlying demand-decline activity.
Technology-specific guardrails should also be incorporated into the whitelist and technical screening criteria where necessary. For example, where carbon capture and storage is eligible, criteria should address the full emissions-reduction outcome and relevant capture, transport, storage and permanence risks rather than treating deployment of the technology itself as sufficient for eligibility.
The final guardrail framework should therefore combine ex ante eligibility restrictions, quantitative performance requirements, ongoing verification and ex post consequences. Given the elevated lock-in and claims risks associated with demand-decline activities, these requirements should constitute conditions for eligibility rather than optional disclosures.

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

Further development should focus on the cross-cutting rules needed to ensure that the framework produces consistent classification outcomes across sectors. In particular, the methodology or implementation framework should clarify the unit of assessment and activity boundaries; category precedence where more than one classification could appear applicable; governance for selecting and updating approved climate pathways; treatment of material emissions and relevant absolute-emissions considerations; and how DNSH and MSS requirements interact with climate classification.

The framework should also prevent conclusions at one level from being inappropriately generalized to another. Eligibility of a ring-fenced transition or abatement measure should not imply alignment of the broader activity, asset or entity, and rules should govern allocation and aggregation where only part of an investment is eligible.

Implementation provisions should address evidence requirements, missing or inconclusive data, assurance, monitoring and reassessment, changes in eligibility following revised criteria, and treatment of outstanding labelled instruments. The framework should also distinguish clearly between activities that are non-aligned, harmful, outside the taxonomy’s scope, not yet covered, not assessed, or unable to be assessed because evidence is insufficient, rather than treating these outcomes as equivalent.

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

The proposed approach contains the appropriate building blocks. Business Futures Pathway should also consider developing a common cross-sector TSC development protocol before sector criteria are finalized to ensure that the same methodological principles produce consistent and comparable outcomes across activities.

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

Important

Revise as necessary during regular review periods

Very important

Primarily use quantitative metrics

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 TSC should strike a balance between credibility and innovation. They should also strive to be technology-neutral and performance-based, becoming technologically specific or prescriptive only where this is necessary to ensure environmental integrity, prevent carbon lock-in, address material lifecycle impacts, or provide a practical and verifiable criterion where robust performance metrics are not available. Criteria should also be forward-looking and dynamic, with sunrise and sunset dates and regular reviews so that technology-specific provisions do not impede innovation or become obsolete. Where specific technologies or practices are referenced, an equivalent-performance pathway should generally be available for emerging technologies capable of demonstrating the same or better climate outcome.

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?

We broadly agree with an approach that focuses initially on Scope 1 emissions while addressing Scope 2 and Scope 3 where they are material and where credible, practicable methods exist. However, materiality should ultimately be the governing principle rather than emissions scope alone. A primarily Scope 1 approach is justified by operators' greater control over direct emissions and the current limitations in Scope 2 and 3 data, but it should not result in material indirect emissions being systematically excluded from taxonomy alignment assessments.

The appropriate treatment should be determined on an activity-by-activity basis. Where Scope 2 or 3 emissions represent a significant share of an activity's climate impact, the taxonomy should seek to address them through direct quantitative thresholds, lifecycle metrics, or credible proxies. Where measurement or technological constraints make such requirements impractical today, the taxonomy could use phased implementation or sunrise dates.

Over time, as emissions data, disclosure practices and methodologies improve, the taxonomy should progressively expand its treatment of Scope 2 and 3 emissions and move toward lifecycle-based assessment where this materially improves the credibility of the classification.

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

Satisfied

23. Is there any other feedback you would like to provide on the methodology report as a whole that has not already been covered?

We are very supportive of the proposed approach. The proposed framework provides a credible foundation for continued development. Canada urgently needs a robust taxonomy to support the achievement of its net-zero objectives by 2050. However, the need for timely implementation should not come at the expense of credibility, integrity, or rigor.

To further strengthen the credibility of the proposed taxonomy, we recommend that the following elements be considered.

First, the taxonomy should include a risk-based and proportionate assurance framework for taxonomy-alignment claims. All claims should be supported by a standardized minimum evidence package sufficient to enable an independent party to reproduce the assessment. This should include clear requirements regarding data sources, calculation methodologies, documentation retention, and reassessment. The framework should also establish clear reassessment frequencies, as well as transparent procedures for correcting or restating claims and addressing loss of alignment where applicable criteria are no longer met or material errors are identified.

Second, the taxonomy should establish a common data framework specifying the minimum data requirements for each criterion and a clear hierarchy of acceptable data sources. The framework should prioritize measured and verified activity-level data, while permitting standardized estimates or proxies where such data are not reasonably available. It should also prescribe approved estimation methodologies, conservative assumptions, documentation requirements, and explicit disclosure of data quality and missing-data limitations. These requirements should be proportionate to the materiality of the relevant criterion and the capacity of the user, including through practical compliance pathways for SMEs and private assets. At the same time, data limitations should not be permitted to substantiate taxonomy alignment where the available evidence is insufficient to demonstrate that the applicable criteria have been met.

We thank you for your efforts in advancing the development of Canada’s taxonomy and wish you continued success as this important initiative moves forward.