The net-zero ESG agenda launched under Justin Trudeau and now expanding under Prime Minister Mark Carney’s Liberal government continues to raise serious questions. For many observers, the latest announcement of a C$400 million loan to Algoma Steel appears less like industrial support and more like a political subsidy propping up a shaky framework built on the declining voluntary carbon market (VCM).
The Legato Connection
Why does this matter? Because in May 2021, Algoma Steel announced it would once again go public through a merger with New York–based Legato Merger Corp, a NASDAQ-listed Special Purpose Acquisition Company (SPAC) focused on renewable energy, infrastructure, and industrial ventures.
The Legato merger positioned Algoma to access ESG-related capital markets at a time when carbon credits looked profitable. That was before Donald Trump’s return to the U.S. presidency. Today, with Trump rolling back environmental mandates and the voluntary carbon market in steep decline, the outlook is much less favorable.
The Problem with ESG and the Carbon Market
The ESG model has always depended on government mandates, subsidies, and the sale of carbon credits. Yet the voluntary carbon market hit a six-year low in 2024, plagued by scandals, weak demand, and a lack of global standardization.
Mark Carney’s government appears to be attempting to revive the carbon credit system by using taxpayer-backed loans and guarantees. The C$400 million loan to Algoma, alongside Ontario’s additional C$100 million, effectively gives Algoma significant leverage—with no guarantee the company will use the funds as intended. They could simply restructure, relocate, or downsize later, much like Canada’s failed EV battery projects.
Canada’s Battery Plant Failures: A Warning
Recent events underline the risks.
- Northvolt’s Quebec battery plant collapsed in September 2025 after losing government funding.
- BASF’s Bécancour project was suspended earlier this year due to slowing EV demand and financial pressures.
These failures reflect a hard reality: without genuine market demand, ESG projects quickly unravel—leaving taxpayers on the hook.
Government “Money” Isn’t Real Capital
Some argue that if Algoma fails, the government can recover its investment. That view is misguided. Governments do not generate wealth—they collect taxes or print money. Loans, subsidies, and bailouts simply shift risk from corporations onto taxpayers.
A healthy economy requires a thriving private sector, where property values and investments rise through real productivity. ESG and net-zero mandates function as hidden taxes, increasing costs while delivering no organic market demand.
Carney’s Miscalculation
Mark Carney is widely regarded as a skilled economist and central banker. But his ESG-driven worldview may blind him to political and economic realities. He views numbers as levers to be pulled, imagining that careful accounting and government-backed financing can revive the voluntary carbon market.
The flaw in that vision is simple: without coercion, there is no market for ESG products. And with global debt levels soaring, perpetual subsidies are unsustainable. Countries like Indonesia can easily ignore ESG frameworks because participation in the VCM is, by definition, voluntary.
What the Loan Really Means
Officially, Ottawa says the C$400 million loan will help Algoma Steel—employing 2,500 workers in Ontario—“adapt operations, remain competitive, and protect jobs” amid U.S. tariffs. But the deeper reality is that this deal gives Algoma options:
- Take the money and restructure later.
- Use subsidies as leverage for corporate bonds or private financing.
- Potentially relocate or downsize, as other subsidized companies have already done.
Either way, taxpayers assume the risk.
Conclusion
The Algoma loan illustrates why the ESG agenda and voluntary carbon market are collapsing under their own weight. Without genuine consumer demand, these projects survive only through bailouts. Mark Carney may believe he can engineer a revival, but Canadians should be skeptical.
What Algoma truly gained is leverage, while taxpayers gained risk. Unless voters demand better, the cycle of subsidies, failures, and corporate exits will continue.
Consider making Jesus Christ your Lord and Savior today. True hope does not come from governments, subsidies, or carbon markets, but from God—who offers freedom, truth, and eternal life.
