The $225-million plant in Kingston to produce infant formula for export to China appears to be in trouble flowing from the U.S.-Mexico-Canada trade deal.
The CBC is reporting that the plant has capacity to produce 60,000 tonnes per year, but the USMC deal caps Canadian exports of skim milk powder at 13,333 tonnes, rising by only 1.2 per cent per year.
Anything more than that gets hit with a levy of $4.25 per kilogram.
The Freihe Canadian Royal Milk company was also planning to buy milk at the Class 7 price the Dairy Farmers of Ontario marketing board established to take back a market being filled by diafiltered milk from the U.S.
That was also lost in the USMC trade deal.
If the venture folds, it would be the second time a Chinese-backed plant to produce infant formula for the Chinese market has foundered. The other was a plant in Toronto that was built, but never opened.
