Taxonomy Foundations
Please feel free to answer only the questions that are of the most interest and relevance to you.
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?
Select
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?
Select
5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?
Select
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?
Select
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?
Select
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?
Select
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?
Select
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?
Select
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 proposed guardrails for the abatement measures category face a number of challenges regarding their scientific validity and practicality. First, they do not address downstream (Scope 3) combustion emissions, the vast majority of the oil and gas sector's climate impact (Suzuki, 2025). Second, the guardrails rely on activity-level criteria but ignore entity-level transition credibility. Fossil fuel companies can invest in abatement while simultaneously expanding production. To date, no Canadian oil and gas companies have acknowledged the need for a managed decline. Third, distinguishing between "existing" and "new" infrastructure is nearly impossible because oil and gas operations often expand incrementally. Similarly, it is unclear how eligible activities could be limited to those that do not extend the lifetime of existing assets – CCUS is shown to prolong the life of fossil fuel infrastructure (Davoodi et al., 2024). The only credible guardrail to protect the taxonomy’s credibility is exclusion of oil and gas.
The abatement measures category is fundamentally misaligned with scientific models for achieving net-zero emissions in line with the goals of the Paris Agreement. Global research from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) shows that oil and gas production must be rapidly phased down to limit global warming to well below 2°C (IEA, 2021; IPCC, 2022; IPCC, 2023). The abatement measures category does not contribute to the phase out of oil and gas.
Similarly, research from Canada’s Energy Regulator shows that the phase out of oil and gas is necessary to achieve net-zero by 2050 in Canada. The Methodology report notes “most of the emissions reductions to the natural gas sector…occur as a result of declining demand rather than abatement measures in the sector” in the 2023 net-zero model from the Canada Energy Regulator. The Methodology Report also cites findings from the Canada Energy Regulator’s 2026 report which suggests that global demand for oil and gas may not decrease rapidly prior to 2050. Regardless of demand decline timing, climate science shows that oil and gas production must be rapidly phased down to achieve net-zero. The taxonomy should be based in science, rather than projected supply and demand trends.
Under the abatement measures category, listed examples of eligible technologies are not proven to provide high levels of emissions reductions. Carbon capture, utilization, and storage projects are found to be used more commonly for enhanced recovery of oil and gas for commercial purposes than for climate mitigation, and typically underperform predicted capture levels (Fraser Institute, 2026). CCUS cannot realistically be expected to sequester more than a small fraction of emissions from Canada’s overall energy sector (Ibid). For advanced economies like Canada, the IEA actually recommends early retirement of older plants rather than retrofitting them with CCUS (IEA, 2020). The IPCC notes it is one of the least feasible and most expensive solutions for the energy system (IPCC, 2023 pages 86, FN 136, 103).
With no enforcement mechanism, the abatement measures category may result in capital flowing to oil and gas companies based on commitments to decarbonize that are never upheld. If oil and gas activities are not simply excluded from the taxonomy, firms can make promises to reduce emissions in the future, secure preferential capital, and then fail to deliver. Many of Canada’s largest oil and gas producers made net-zero commitments that they never acted on and have since walked away from (Price & Scott, 2025). The Oil Sands Alliance in Canada originally committed to reduce emissions by 22 MT by 2030 with its CCS project, and to achieve net-zero by 2050 from oil sands production (Bulowski & McIntosh, 2026). They have received tax credits and, recently, commitments for operational subsidies, but the emissions reduction target has been revised down to 6 MT by 2035, with only an additional 10 MT by 2045 (Ibid). As there is no enforcement or oversight mechanism built into the taxonomy, there is nothing to prevent the abuse of the abatement measures category by industry.
There is no need for the abatement measures category or label under the taxonomy: oil and gas companies can still access funds for marginal emissions reduction measures. The taxonomy should maintain its mandate of only identifying activities that align with the climate transition. The inclusion of the category is not necessary for the oil and gas sector to continue accessing capital – the taxonomy does not prohibit investment in any sector. Canadian oil and gas companies are currently achieving windfall profits for Q1 2026 (Bakx, 2026; Canadian Press, 2026). Significant public subsidies are already available to the sector for CCUS investments (Krugel, 2026). The Government of Canada has provided $85.2 billion CAD to the industry since 2020 (Environmental Defence Canada, 2026). Private investors can make independent decisions to invest in oil or gas related projects regardless of the taxonomy. Attaining a label under Canada’s taxonomy is not necessary.
Emissions reductions in the oil and gas sector are more likely to be achieved through regulation (e.g. industrial carbon pricing, an oil and gas emissions cap, methane regulations, bans, and moratoriums) than through voluntary frameworks like the taxonomy (Canadian Climate Institute, 2024; International Institute for Sustainable Development, 2024).
The precedent to create a fossil-fuel-free taxonomy in a country that is a large fossil fuel producer has already been set by Australia (Kelly, 2026).
It is inherently contradictory to include activities that are “unable to achieve the life cycle emissions reductions necessary to align with Paris-aligned global pathways” while “anchoring the taxonomy in the ambition of the Paris Agreement” (quotes from Methodology Report).
The abatement measures category would entrench carbon lock-in by directing capital towards the oil and gas sector that would have otherwise gone towards green and transition-aligned activities. Carbon lock-in occurs when fossil fuel-intensive systems perpetuate, delay or prevent the transition to low-carbon alternatives. The Methodology Report acknowledges that the abatement measures category poses a high risk of carbon lock-in. By including the abatement measures category, capital that would have flown towards green and transition activities may instead flow towards the oil and gas sector – which perpetuates carbon lock-in.
References:
Bakx, K. (2026, April 27). The $100 barrel: oil producers begin unveiling profits and windfall spending plans. CBC. https://www.cbc.ca/news/canada/calgary/bakx-wti-iran-q1-earnings-oil-9.7176422
Bulowski, N., & McIntosh, J. (2026, July 13). Feds lower carbon capture project targets and offer new subsidies as costs double. Canada's National Observer. https://www.nationalobserver.com/2026/07/13/news/feds-lower-carbon-capture-project-targets-offer-new-subsidies-costs-double
Canadian Climate Institute. (2024, March 21). Which Canadian climate policies will have the biggest impact by 2030? 440 Megatonnes. https://440megatonnes.ca/insight/industrial-carbon-pricing-systems-driver-emissions-reductions/
Canadian Press. (2026, May 5). Suncor first-quarter earnings jump to $2.1B as it reports record production. CTV News. https://www.ctvnews.ca/calgary/article/suncor-first-quarter-earnings-jump-to-21b-as-it-reports-record-production/
Climate Bonds Initiative. (2023). Fossil Gas in Taxonomies: What Lies Beneath. Report. https://www.climatebonds.net/files/documents/Fossil-Gas-in-Taxonomies-What-Lies-Beneath.pdf
Davoodi, S., Al-Shargabi, M., Wood, D. A., Mehrad, M., & Rukavishnikov, V. S. (2024). Carbon dioxide sequestration through enhanced oil recovery: A review of storage mechanisms and technological applications. Fuel, 366(131313). https://doi.org/10.1016/j.fuel.2024.131313.
Environmental Defence Canada. (2026). Climate Promises, Industry Handouts. Canada’s Fossil Fuel Funding in 2025. https://environmentaldefence.ca/wp-content/uploads/2026/05/Environmental_Defence_2025_FFS_Report-1.pdf-1.pdf
Fraser Institute. (2026, July 7). Technological limitations, economic and infrastructure challenges raise questions about Carbon Capture, Utilization and Storage (CCUS) as foundation for climate policy. Study. https://www.fraserinstitute.org/studies/challenges-scaling-up-carbon-capture-utilization-and-storage-technologies
IEA. (2020). CCUS in the transition to net-zero emissions. CCUS in Clean Energy Transitions. https://www.iea.org/reports/ccus-in-clean-energy-transitions/ccus-in-the-transition-to-net-zero-emissions
IEA. (2021). Net Zero by 2050. A Roadmap for the Global Energy Sector. https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf
International Institute for Sustainable Development. (2024, May). Transitioning Away From Oil and Gas: A production phase-out primer. IISD Report. https://www.iisd.org/system/files/2024-05/transitioning-away-from-oil-gas.pdf
IPCC. (2022). Mitigation Pathways Compatible with Long-term Goals. Chapter 3. https://www.ipcc.ch/report/ar6/wg3/downloads/report/IPCC_AR6_WGIII_Chapter03.pdf
IPCC. (2023). Sixth Assessment Report. Synthesis Report. https://www.ipcc.ch/assessment-report/ar6/
Kelly, J. (2026, July 15). Rules and Tools From Australia’s Sustainable Finance Roadmap: Insights for Canada’s sustainable finance future. International Institute for Sustainable Development. https://www.iisd.org/publications/report/australia-insights-canada-sustainable-finance-future
Krugel, L. (2026, July 13). Agreement reached on multibillion-dollar Pathways carbon capture and storage project. CBC. https://www.cbc.ca/news/canada/edmonton/alberta-ottawa-pathways-oilsands-carbon-capture-9.7268392
MSCI. (2023). EU Taxonomy: Is There Sustainable Gas-Fired Power Generation? Research & Insights. https://www.msci.com/research-and-insights/blog-post/eu-taxonomy-is-there-sustainable-gas-fired-power-generation
Price, M., & Scott, A. (2025, March 21). As oil CEOs debase their own climate pledges, Bay Street must act. Globe and Mail. https://www.theglobeandmail.com/business/commentary/article-as-oil-ceos-debase-their-own-climate-pledges-bay-street-must-act/
Suzuki, D. (2025, June). The burning issue of fossil-fuelled Scope 3 emissions. https://davidsuzuki.org/story/the-burning-issue-of-fossil-fuelled-scope-3-emissions/
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 only credible guardrail to protect the taxonomy’s credibility and scientific validity is exclusion of oil and gas.
17. Is there any other feedback you would like to provide on the proposed activity classification framework?
No
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?
Select
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?
No