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

Prioritization should be done in consideration of global energy security concerns, the evolution of investors' appetite and global trends in investment products and advancing Indigenous economic reconciliation.

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

TMX Group agrees with these principles but strongly recommends that usability serves as the primary constraint for the other principles. A credible science-based framework that is unusable for Small and Medium Enterprises (SMEs), which represent the majority of listed Canadian companies, will act as a barrier to scaling climate solutions and transition projects needed to decarbonise our economy. For the taxonomy to succeed, it must be operationally practical for the companies that are required to generate and disclose the underlying data to demonstrate their alignment. The Council should consider establishing tiered criteria and a reduced level of reporting for SMEs that enables them to leverage the taxonomy.
Interoperability is necessary to facilitate cross-border capital flows, but it should reflect Canada’s specific economic, technical and geographic challenges and should be anchored in national transition pathways (inclusive of regional grid realities) and strategies where those have been defined.
A dynamic and responsive framework is beneficial as long as changes to the taxonomy criteria are predictable (e.g. every 5 years). The review cycle should not be so onerous that it creates a burden for users of the taxonomy. To ensure it is responsive to new technology development, an application process should be designed to allow for the assessment of new technologies/measures outside of the planned review process.
TMX strongly supports the proposal to exclude mandatory, entity-level net-zero commitments and transition plans for green and transition categories. Forcing these mandates onto Canadian issuers would compromise the usability of the taxonomy and the competitiveness of domestic capital markets.
Finally, we note that prioritizing Electricity in the first phase should be reconsidered given the relatively small footprint of that sector resulting from coal-fired facilities phase-out and technology shifts. We suggest that Mining should be substituted given that critical minerals mining will directly power the energy transition and thus, it constitutes an area where Canada has the opportunity to demonstrate leadership and where clear guidelines can help accelerate domestic supply chain funding.

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

Credible

Important

Usable

Very important

Interoperable

Important

Dynamic

Important

Regionally Specific

Very important

Prioritized

Not that 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?

Strongly agree

4b. Please explain your answer in the space below

TMX Group agrees with a partial alignment approach. Full alignment could impose an insurmountable reporting burden on capacity-constrained entities, particularly SMEs, restricting their access to sustainable finance. A partial alignment approach balances scientific integrity with market usability.

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

TMX Group broadly agrees with the scope of objectives, but the manner in which the objectives will be defined and especially assessed or audited should not impose undue burden on taxonomy users.

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

TMX Group recommends firmly grounding the frameworks in existing Canadian legislation to provide regulatory certainty and to ensure it represents the current national consensus on each objective. Going beyond existing laws should only be done in VERY LIMITED cases where the risk of potential harm is real (e.g. the law is silent on a topic, the law is outdated and a new standard is accepted as standard practice), in consultation with industry experts, to avoid creating uncompetitive market conditions for Canadian issuers.

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

We recommend focusing on alignment with established laws, except in very limited conditions, rather than creating entirely new standards that conflict with or exceed current regulatory requirements.

8a. Do you agree or disagree that different DNSH/MSS standards should apply to projects or entities of different sizes? E.g. more comprehensive disclosures required for larger projects and/or entities, with more streamlined disclosures for smaller projects and/or entities?

Strongly agree

8b. Please explain your answer in the space below

We agree that obligations must be right-sized to the entity or project size, resources and ability to meet the requirements. DNSH and MSS standards should be defined with the objective of limiting burden to the extent possible, especially given the maturity of Canada’s regulatory regime that already imposes requirements to preserve the environment, respect human rights, etc. These elements of the framework should avoid resulting in the development of duplicative requireme

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?

Given that net-zero and transition projects will largely be built on Indigenous territories, the objective of Indigenous reconciliation—inclusive of economic sovereignty, equity ownership and treaty rights protections—should be integrated as a core part of the eligibility assessment for eligible projects, rather than just an MSS checklist item.
TMX recommends that, at a minimum, the MSS framework recognizes direct Indigenous equity participation and joint ownership as a primary indicator of procedural alignment and project certainty.

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

TMX emphasizes the importance of a framework that is proportional and applied in a manner that is calibrated to the entity and the risks associated with the proposed activity. The entity should be responsible for self-disclosure against the criteria, but the cost of assessment and due diligence should not be imposed on the entity.

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

Agree

12b. Please explain your answer in the space below

TMX Group broadly agrees with maintaining a credible standard for the green category, provided that the definitions and criteria are carefully tailored to the state of maturity and advancement of each relevant economic sector.
However, as taxonomy development and use is in its nascent stages in Canada, consideration should be given to relying on the International Capital Market Association’s (ICMA) Green Enabling Project Guidance which extends the green definition to the broader supply chain, at least in the first iteration of the guidance, to help drive adoption. This could be revised and tightened in line with evolving international standards such as ICMA’s and domestic market maturity.

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

Neutral

13b. Please explain your answer in the space below

TMX Group agrees with the proposed applicability of the taxonomy to the whole-of-the-activity level and to the measure level as this will promote broader uptake.
TMX also supports the inclusion of heavy industrial sectors but strongly recommends broadening the eligibility criteria. The framework should explicitly include energy projects that displace higher-emitting production internationally and support affordable energy costs within the transition-eligible category. For example, Canada's potential to export LNG to Asian markets to replace coal-fired generation can have a significant global emissions reduction impact. These investments should be considered transition-eligible given their global contribution to emissions reduction at least, in the first iteration of the taxonomy.

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

14b. Please explain your answer in the space below

TMX supports the proposed approach, but considering that transition planning is just beginning in Canada and that relevant guidance is not yet available for corporations, expectation for the requirement of whole-of-activities’ demonstration of net-zero pathways to 2050 should be commensurate with the level of maturity of our market.

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

Disagree (i.e., disagree because of how category is designed)

15b. Please explain your answer in the space below

TMX Group supports the rationale for and the inclusion of eligible oil and gas related activities in the overall taxonomy framework based on their potential for outsized contribution through large-scale carbon capture projects, methane abatement and other technologies, to achieving Canada’s emissions reduction targets .
TMX however urges caution against their relegation to a third, separate abatement measure category as this approach will work against the interoperability principle that should guide the taxonomy. “Abatement-related investments” are not a recognized portfolio investment category and may not successfully attract international investors that seek to align their portfolio to emissions-reducing activities known as transition or green. As a result, this distinction may work against the ultimate goal of attracting capital to finance overall emissions reductions in Canada.
TMX suggests that abatement measures should instead be included under the broader transition eligibility category to promote recognition and uptake. As the taxonomy evolves and is revised over time, eligibility and guardrails around emissions abatement measures may become more stringent or ultimately phased out.
TMX also highlights that the taxonomy's "demand-decline" label must not ignore global emissions displacement. Lower-carbon exports like Canadian LNG can displace higher-emitting coal power internationally, resulting in net global emissions reductions while protecting Canadian competitiveness.

16. Should any additional guardrails be considered?

TMX urges the Council to modify the proposed guardrails to reflect global market dynamics, energy security, and with input from the sector to ensure they consider operational realities. For example:
-Restricting eligibility strictly to "existing assets" must be revised; ongoing developments and new final investment decisions are standard for "sustaining production" that is required to offset normal reservoir depletion. Given the potential for new export pipelines, the reality is that these will require new production to come online. This production should be assorted with the best emissions reduction technology available.
-Limiting measures to those that don't extend the lifetime of existing assets may not be suitable. For example, methane capture investment on facilities may extend their lifetime and eliminate the need to build new assets while meeting best-in-class performance.
-Requiring scope 1 and 2 emissions reductions is obscuring electrification solutions applied to oil and gas extraction which come with significant scope 1 reductions. Electrification of oil and gas processing to replace fuel-gas where feasible, constitutes significant emissions reductions that we should aim to promote.
-Requiring significant upstream scope 3 reductions only makes sense for fuel distributors. The bulk of emissions from the oil and gas sectors is associated with downstream scope 3 emissions which is an area over which producers have no control.
-Requiring decommissioning within certain timeframes or restricting investments to existing assets only, runs the risk of stranding assets prematurely and stifling necessary transition capital.
-Finally, the requirement for issuers to provide entity-level transition plans should be reconsidered in light of the fact that certain companies may not have the objective to transition to a lower carbon business model in the future. Such a requirement could prevent the issuers from accessing the capital required to implement emission reduction technologies, negatively impacting the attainment of Canada’s emissions targets.

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

Neutral

18b. Please explain your answer in the space below

TMX Group agrees that a robust, science-based approach is necessary, but strongly advocates that industry experts must be formally included in the development process to ensure the criteria are practically achievable and commercially viable for the sectors they target. Criteria should be developed in consideration of relevant legislated requirements in sectors where they exist and progressively be tuned to align with developments in commercially available technologies, leading practices and net-zero 2050 pathways. Efforts should be made to consider national and regional industrial strategies in sectors where they exist.

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

Important

Include sunset and/or sunrise dates where relevant

Important

Revise as necessary during regular review periods

Important

Primarily use quantitative metrics

Not that important

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

Not that important

Informed by a range of robust methods

Important

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

The criteria should remain technology-neutral and focus on emissions outcomes and verified lifecycle performance analysis rather than prescribing specific technologies. Highly prescriptive criteria risk stranding assets and stifling innovation, especially for SMEs that require flexibility to adopt the most cost-effective transition technologies.

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?

TMX Group supports the described approach but considerations should be given to level of control and technology readiness specific to each sector and to the Canadian market. TMX also emphasizes that a "safe harbour" relative to any such related disclosures is critical for companies, particularly given the estimation challenges associated with Scope 3.

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

Neutral

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

TMX Group believes a taxonomy with both a green and a transition category that includes investments that reduce emissions in the oil and gas sector is a positive development to attract capital to decarbonization in Canada and achieve Canada’s emissions reduction targets.
TMX objects to the proposed timeline that defers all research and technical working group mobilization for the development of criteria for abatement measures relative to the oil and gas sector until 2027. As outlined in the report, the oil and gas sector generates 30% of Canada's emissions. Leaving this sector in regulatory limbo for an additional year introduces market uncertainty. The Council should immediately activate dedicated oil and gas technical working groups to co-design made-in-Canada guardrails concurrently with Phase 1, preventing further delays in implementing significant emissions reductions that could otherwise be effected with the guidance that is needed for capital to flow toward these initiatives.
Success depends heavily on adopting a "made-in-Canada" approach, that is calibrated to the maturity and technology readiness of our main economic sectors in order to foster usage and uptake of the taxonomy. Broadening eligibility criteria for the transition category and ensuring engagement from the relevant sectors will be critical to secure industry buy-in.
TMX recommends that the Council assess the need to co-develop and release Taxonomy-Aligned Debt Implementation Guidance that acts as a practical manual to incorporate Canadian taxonomy screening criteria into established ICMA/Loan Market Association (LMA) bond and loan structures. The Canadian transition bond market remains virtually non-existent despite industry demand for decarbonization capital. Market participants require clear, standardized rules upfront to engineer customized indices, derivatives, and fixed-income products that allow global asset managers to confidently back Canadian transitions.