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
• Water and marine resource conservation

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

These three objectives should be treated as an integrated second-phase cluster rather than developed through separate and open-ended workstreams. They should also be recognized as economic objectives, not merely environmental safeguards. Nature is productive capital: wetlands, forests, peatlands, grasslands, freshwater systems, and coastal ecosystems regulate carbon, reduce physical climate risks, support biodiversity, and deliver services that sustain economic activity. When degradation of these assets is not reflected in project appraisal or financial decisions, the economy can record apparent gains while running down natural wealth and transferring costs to businesses, households, and governments. Developing biodiversity, adaptation, and water objectives together would improve scientific coherence, reduce overlapping definitions and reporting requirements, and create a more usable framework for business and finance.
The Council should publish a firm, near-term roadmap for recognizing substantial contributions to these objectives. Excluding or indefinitely postponing them would be a major missed opportunity given Canada’s commitments under the Kunming-Montreal Global Biodiversity Framework, especially Target 2 on restoration, Target 14 on integrating biodiversity into decision-making and aligning financial flows, and Target 19 on mobilizing public and private finance and optimizing climate-nature synergies. The roadmap should be coordinated with Canada’s 2030 Nature Strategy and with the Expert Taskforce on Natural Capital Accounting and Nature Financing, formally launched on August 7, 2026. Coordinating these initiatives now would help avoid new policy silos and create a more coherent framework for capital allocation, disclosure and business implementation.
The six principles are sound and mutually reinforcing. Credibility without usability may produce limited uptake; usability without credibility would undermine the taxonomy’s purpose. Interoperability is important for cross-border capital, while a dynamic and regionally specific framework is essential in a country with diverse energy systems, ecosystems, Indigenous rights contexts, and economic structures. The framework should also explicitly incorporate environmental integrity, transparency, rights-based governance, and integrated climate-nature decision-making. These concepts should not be left implicit because they are central to legitimacy and investor confidence.
The principles should guide both the methodology and its implementation. Where trade-offs arise, credibility, environmental integrity, and rights protection should set the minimum boundary; usability should then be achieved through clear definitions, common data, proportionate reporting, and streamlined administration rather than through weaker substantive standards.

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

Very 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

The proposal is transparent, but transparency alone does not convert material non-compliance into alignment. A project that meets an emissions threshold while causing significant harm to an irreplaceable ecosystem, water system or Indigenous rights should not be described as taxonomy-aligned. The framework should distinguish among: (1) taxonomy eligible; (2) climate-mitigation criteria satisfied; (3) partially aligned or remediation in progress; and (4) fully taxonomy aligned. Only the final status should permit an unqualified alignment claim.
A partial-alignment pathway may be useful as a transparent transition or remediation status, but it should be clearly labelled and time-limited. The framework should identify which failures are remediable and which are disqualifying. Violations of Indigenous rights, destruction of unique or irreplaceable ecosystems, unlawful pollution, or failure to address material physical climate risks should preclude alignment. This approach preserves market usability without diluting the meaning of “Do No Significant Harm.”

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

The environmental scope appropriately includes adaptation, biodiversity and healthy ecosystems, water, pollution and circular economy. The social scope appropriately includes Indigenous rights, human rights, labour standards, anti-corruption, and taxation integrity. The framework should expressly address ecosystem integrity and connectivity, cumulative effects, species and critical habitat, soil health, cultural heritage, and community impacts where material. Most importantly, biodiversity, restoration, adaptation, and water should not remain only defensive DNSH considerations; they should become substantial-contribution objectives in a time-bound second phase.
A climate investment can reduce emissions and still undermine long-term resilience by damaging wetlands, forests, freshwater systems, or other natural infrastructure. Conversely, restoration and conservation investments can deliver climate, biodiversity, water, and community benefits while creating or protecting economic value. Nature is productive capital: wetlands can reduce flood losses, forests regulate water and carbon, and healthy soils sustain agricultural productivity. When these services are degraded without being reflected in conventional accounting or investment decisions, projects can appear economically beneficial while running down natural wealth and shifting future costs to businesses, households, and governments. The taxonomy should therefore evolve from a climate-only contribution test with nature safeguards toward an integrated architecture that recognizes credible positive contributions to natural capital, resilience, and long-term productivity.

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

Canadian legislation should provide a clear and familiar baseline, but it should not automatically be the ceiling. Laws and regulations differ among jurisdictions and may not fully address cumulative effects, ecological connectivity, climate resilience, emerging science, or internationally recognized rights and safeguards. A voluntary taxonomy may legitimately establish a higher threshold for investors seeking an alignment label, provided the criteria are transparent, evidence-based and practical.
Taxonomy criteria should not attempt to replace environmental or social regulation. Their role is different: to identify investments that merit a credible market label. Where legal compliance does not establish a sufficiently rigorous alignment threshold, the taxonomy should draw on accepted international standards, ecological science, Indigenous knowledge and best practice. This will strengthen rather than undermine interoperability because global investors increasingly expect safeguards that extend beyond minimum legal compliance.

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

Priority areas include: cumulative effects and landscape- or watershed-level ecological thresholds; the mitigation hierarchy of avoid, minimize, restore and only then compensate residual impacts; exclusion or heightened safeguards for unique and irreplaceable ecosystems, critical habitat, wetlands, peatlands, old-growth forests and other high-integrity ecosystems; climate adaptation and physical-risk assessment over the full asset life; water quantity, quality and watershed security; material pollution and toxic releases; ecosystem connectivity and restoration durability; and Indigenous rights, title, treaty obligations and applicable FPIC requirements. The framework should also prevent offsetting or restoration claims from being used to justify avoidable destruction of irreplaceable nature.

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

Small organizations should not face the same administrative burden as large issuers when the underlying risk is lower. However, significant harm does not become acceptable because a project sponsor is small. The taxonomy should use risk-based proportionality: streamlined templates, common datasets, safe-harbour methodologies and proportionate assurance for smaller projects, while maintaining the same substantive environmental and rights-based thresholds.
Proportionality should be based not only on entity size but also on the nature, location, scale, and reversibility of potential impacts. A small project in a highly sensitive ecosystem may require more scrutiny than a large low-risk efficiency project. Common digital tools, pre-approved methodologies, and public environmental data can reduce compliance costs without reducing integrity.

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

Yes. The main gaps are: allowing unqualified partial alignment; relying too heavily on legal compliance without national minimum safeguards; insufficient treatment of cumulative and landscape-level effects; no explicit no-go or exclusion rules for irreplaceable ecosystems; no clear application of the mitigation hierarchy; limited entity-level requirements for transition and abatement issuers; incomplete treatment of land-use and life-cycle effects; insufficient recognition of material natural-capital and ecosystem-service losses in economic assessment; and insufficient detail on Indigenous co-development, consent, benefit sharing and grievance mechanisms. The framework should also require monitoring of outcomes over time, transparent remediation processes and consequences when an activity ceases to meet the criteria.

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?

Co-develop the MSS criteria with Indigenous rights holders and treat Indigenous rights as a substantive condition of alignment.
Indigenous Peoples must be recognized as rights holders and governments, not simply stakeholders. The framework should be co-developed with a representative range of First Nations, Inuit and Métis organizations and rights holders, with distinctions-based approaches. Assessment should begin early, before material project decisions are fixed, and continue throughout project design, financing, construction, operation and closure. The taxonomy should require documented processes for identifying affected rights holders, sharing complete and accessible information, supporting Indigenous capacity to participate, addressing cumulative effects, and evidencing consent where required by applicable law, agreements or the adopted rights-based standard. It should include independent grievance and review mechanisms and should recognize Indigenous ownership, co-governance, monitoring, stewardship and benefit participation as central design features rather than optional co-benefits.

11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?

Build the safeguards as part of a streamlined national implementation architecture.
Canada should avoid creating another stand-alone reporting system. DNSH and MSS implementation should draw from common federal, provincial, territorial, and Indigenous data; regional assessments; recognized certifications; existing impact-assessment information; and interoperable disclosure standards. A public registry, consistent definitions, and tiered assurance could allow information to be reused across planning, permitting, financing, reporting, and monitoring. Coordination with the Expert Taskforce on Natural Capital Accounting and Nature Financing, launched on August 7, is particularly important because its mandate overlaps directly with questions of natural-capital measurement, valuation, and private finance. The objective should be stronger safeguards with less duplication – not weaker safeguards in the name of usability. A streamlined approach could reduce compliance cost and unnecessary red tape while improving the quality and consistency of the information on which investment and policy decisions are based.

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

Agree

12b. Please explain your answer in the space below

A narrow green category is essential to protect clarity and prevent greenwashing. It should be reserved for activities that make a substantial contribution through zero or near-zero emissions, and for direct enabling activities that are demonstrably necessary for those solutions. Higher-emitting upstream suppliers should not become green merely because one customer or end use is green.
Maintain a rigorous green label and apply material life-cycle and nature safeguards.
The green definition should be technologically informed but outcome-based, and it should require full material DNSH and MSS compliance. Nature-based solutions should qualify where they deliver measurable, durable and additional climate benefits while improving or maintaining biodiversity and ecosystem integrity. Monoculture or ecosystem-conversion projects should not qualify solely because they store carbon.

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

Agree

13b. Please explain your answer in the space below

A credible transition category is necessary for emissions-intensive activities such as steel, cement, and chemicals that will remain important in a net-zero economy and currently lack fully scalable substitutes. The distinction between whole-of-activity alignment and specific transition measures is useful, but both pathways require stronger conditions to prevent incremental improvements from being portrayed as Paris-aligned transformation.
Require credible pathways to zero or near-zero performance, absolute-emissions guardrails, and entity-level accountability.
Eligibility should require a material contribution to a science-based sector pathway; no technically and economically feasible zero-emission alternative at the relevant time; consistency with the expected asset life; no increase in incompatible capacity; material Scope 2, Scope 3, land-use and life-cycle impacts; and independent verification. For major transition investments, the issuer should also have a credible entity-level transition plan, aligned capital expenditures, and governance accountability. Intensity improvements should be accompanied by absolute-emissions and carbon-budget tests where production growth could increase total emissions.

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?

Disagree

14b. Please explain your answer in the space below

They are a useful starting point but not yet sufficient.
The proposed guardrails address important concepts, including lack of substitutes, deep reductions and lock-in risk. They should be supplemented by explicit tests for absolute emissions, sectoral carbon-budget consistency, capacity expansion, asset lifetime, capital-expenditure alignment, technological dead ends, material value-chain emissions and the issuer’s broader transition strategy.
Add objective thresholds, entity-level transition conditions and independent assurance.
The taxonomy should not classify a measure as aligned when it marginally improves an asset that remains incompatible with a credible pathway. Criteria should specify the baseline, minimum reduction, duration, review date and sunset date. Major projects should disclose production assumptions and total emissions. A transition label should expire if the activity or issuer fails to meet milestones, expands incompatible capacity, or redirects capital toward activities inconsistent with the pathway.

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

Agree (i.e., agree in principle, with conditions)

15b. Please explain your answer in the space below

A separate abatement category is preferable to misclassifying fossil-fuel emissions-reduction measures as green or transition. It can provide transparent recognition for genuinely additional, near-term reductions at existing assets while communicating that the underlying activity is expected to decline and cannot achieve full life-cycle alignment. The category must remain clearly distinct in name, label, use-of-proceeds reporting, and marketing.
The category should be narrowly ring-fenced and must not finance expansion, life extension, or claims of full sustainability.
Eligibility should be restricted to existing assets and pre-approved measures that deliver significant, independently verified absolute reductions without increasing production, extending asset life, delaying retirement, or crowding out low-carbon alternatives. It should require a credible entity transition plan, capital investment in alternatives, time-bound decommissioning, full material DNSH and MSS compliance, and clear sunset dates. Purchased offsets should not establish eligibility. The label should state that the financed measure is “abatement-aligned,” not that the underlying activity or issuer is green, sustainable or transition-aligned.

16. Should any additional guardrails be considered?

Yes – add the following guardrails.
Require: (1) existing assets only, with a clear definition of “existing”; (2) no new production capacity, throughput expansion or material life extension; (3) verified absolute reductions against a conservative and independently reviewed baseline; (4) material Scope 1, Scope 2 and upstream/downstream Scope 3 assessment; (5) no reliance on purchased offsets; (6) full life-cycle analysis for carbon capture, hydrogen, electrification and methane measures; (7) direct measurement of methane and other emissions where feasible rather than reliance on generic factors; (8) a binding retirement or decommissioning pathway and adequately funded closure, reclamation and ecosystem-restoration liabilities; (9) an entity-level transition plan and aligned capital expenditures; (10) full material DNSH and MSS compliance, including Indigenous rights; (11) public reporting and independent assurance; and (12) short, reviewable eligibility periods with automatic expiry unless renewed under updated criteria.

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

Clarify the relationship among activity eligibility, project alignment, issuer claims, and financial-product labels.
The taxonomy should prevent a single aligned activity from being used to imply that an entire company, portfolio or financial product is sustainable. Claims should identify the category, share of proceeds, assessment boundary, criteria version, and safeguard status. Transition and abatement should have stronger entity-level overlays than ordinary green projects because the risk of strategic inconsistency and lock-in is higher. Until the additional environmental objectives are operational, the label should accurately state “climate-mitigation aligned” rather than implying comprehensive sustainability.

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

Forward-looking, quantitative, periodically reviewed and sector-specific criteria are appropriate. The methodology should also require transparent assumptions, public access to supporting evidence, Indigenous participation and knowledge where relevant, and materiality-based treatment of all emissions scopes, land-use change and ecosystem impacts. The criteria-development process should integrate climate science, ecological science, regional conditions, credible sector pathways and practical implementation expertise.
Build criteria that are scientifically robust, predictable for investment, and capable of tightening over time.
Each criterion should state the metric, unit, boundary, baseline, threshold, verification method, data-quality hierarchy, review date, and consequences of non-compliance. Criteria should avoid abrupt retroactive changes, but investors should be warned in advance of planned tightening through sunrise and sunset dates. Public consultation should occur for each sector, with transparent explanations of how evidence and comments affected the final criteria.

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

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?

Primarily outcomes-based and technology-neutral, with selective prescription where needed to preserve credibility.
The taxonomy should generally specify the required environmental performance rather than choose commercial winners. However, greater technology specificity is justified when performance cannot be reliably inferred from an outcome metric, when technologies create distinctive life-cycle or ecological risks, or when a whitelist is necessary to keep an abatement category narrowly ring-fenced. The criteria may identify prohibited technologies, minimum technical features, durability requirements or approved measurement protocols where these are necessary to prevent lock-in, leakage or greenwashing. Technology lists should be reviewed regularly and should not substitute for measured performance.

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?

Disagree with a default Scope 1-first hierarchy; support a materiality-based approach across all relevant emissions and impacts.
For many activities, the principal climate impact occurs outside the facility boundary. Downstream combustion is central for fuels; embodied emissions matter for buildings and infrastructure; purchased electricity can dominate some industrial activities; and land-use change, forest carbon, agricultural inputs and supply chains can be decisive in agriculture, forestry, mining and bioenergy. Scope 2, Scope 3, land-use and life-cycle effects should be included whenever they are material enough to alter the classification. Data limitations should lead to conservative estimates and transparent uncertainty, not omission of material impacts.

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?

The methodology is a promising and thoughtfully designed foundation. Its distinction among green, transition, and abatement activities, forward-looking criteria, and commitment to safeguards are important strengths. Significant revisions are nevertheless required to protect credibility: full material DNSH/MSS compliance for an unqualified alignment claim; stronger transition and abatement guardrails; materiality-based life-cycle boundaries; meaningful entity-level requirements; and a firm roadmap for adding nature, restoration, adaptation, and water as substantial-contribution objectives. The current climate-first structure also misses an opportunity to address a deeper economic blind spot: natural capital is routinely consumed or degraded without the resulting loss of productive economic value being fully reflected in investment decisions. Incorporating nature as a positive objective would make the taxonomy more complete, more economically meaningful, and more future-ready.

Canada should develop a sustainable finance taxonomy that integrates climate, nature and Indigenous rights rather than treating them as separable policy domains. The proposed climate-mitigation framework provides a strong starting point, particularly through its distinction among green, transition, and abatement activities. However, nature should not be regarded simply as an environmental consideration to be protected from harm. It is productive capital: wetlands reduce flood damage, forests regulate water and store carbon, healthy soils sustain agricultural productivity, and functioning ecosystems provide services on which businesses, infrastructure, and communities depend. When natural assets are degraded without their loss being reflected in economic and financial decision-making, apparent short-term gains can mask the destruction of long-term economic value and weaken the productive base on which future prosperity depends. Integrating nature into the taxonomy can help correct this structural economic blind spot.

An activity should also not be described as taxonomy-aligned if it causes significant harm to biodiversity, ecosystems, water resources, or Indigenous rights. The final methodology should therefore require compliance with material DNSH and MSS criteria; establish science-based safeguards that can exceed existing legal minimums; apply the mitigation hierarchy and strong protections for unique and irreplaceable ecosystems; and publish a time-bound pathway for adding biodiversity, ecosystem restoration, climate adaptation and resilience, and water as substantial-contribution objectives. Excluding these objectives would represent a major missed opportunity, particularly given Canada’s commitments under the Kunming-Montreal Global Biodiversity Framework to restore degraded ecosystems, integrate biodiversity into public and private decision-making, progressively align financial flows, mobilize private finance, and optimize synergies between climate and biodiversity finance.

The timing creates a particular opportunity for policy coherence. On August 7, 2026, the Government of Canada formally launched the Expert Taskforce on Natural Capital Accounting and Nature Financing, building on A Force of Nature: Canada’s Strategy to Protect Nature. The Taskforce will provide independent advice on how to better measure, value, and account for nature in decision-making and will develop recommendations aimed at mobilizing private investment for nature-positive outcomes. That mandate is directly relevant to the taxonomy. These initiatives should not develop in parallel silos. Canada has an opportunity to connect climate mitigation, adaptation, biodiversity, water, natural capital accounting, Indigenous partnership, infrastructure planning, financial disclosure, and sustainable finance within a coherent economic architecture.

A coordinated architecture would be good for business as well as nature. Common definitions, shared datasets, consistent metrics, reusable project information, and proportionate assurance could reduce duplicative reporting, overlapping verification processes, and inconsistent requirements. This is not an argument for weaker regulation. It is an argument for stronger, more coherent outcomes delivered with less unnecessary red tape, greater investment certainty, and more timely decision-making. The same high-quality information should, wherever possible, be reusable across planning, permitting, financing, disclosure, and monitoring.

Canada therefore has an opportunity not merely to catch up with international sustainable-finance leaders, but to move from laggard to leader. Rather than replicate taxonomies designed several years ago, Canada can build a second-generation model that recognizes the inseparability of climate and nature, embeds Indigenous rights and participation, connects natural-capital information with investment decisions, and makes the system easier for businesses to navigate. Canada cannot improve long-term productivity by consuming natural capital without recording the cost. A genuinely Canadian taxonomy should help distinguish activities that create durable economic value from those that generate short-term returns by degrading the assets on which future prosperity depends, and direct capital toward a nature-positive, climate-resilient, inclusive, and prosperous economy.