Live in Ontario, Canada. Finished basement has warm air vents in ceiling. The cold air return is located in ceiling as well but has been drywalled over by previous homeowner. In the winter, it gets pretty chilly down there.

Instead of opening up the existing cold air return, I'm considering installing one that is closer to the floor. I'm thinking of using a wall that separates the furnace room and the space in question. My furnace is high efficiency with air input/output via piping to the exterior. Gas water heater located beside furnace is vented to the outside as well.

I've been reading about not placing returns too close to the furnace as there is a risk of CO poisoning. The wall cavity I plan to use is about 4 feet away from the furnace; 7 feet from HWT. Is it ok to still go ahead considering both appliances are sealed systems? Is it better to use wall cavity method or use metal ductwork?

Appreciate any advice/tips/suggestions.