The federal government is providing $16.9 million for improvements to the Gay Lea plant at Teeswater.
The co-operative is investing in waste treatment facilities and to modernize equipment at the dairy-processing plant that employs about 50 workers.
Some of the money comes from a fund to offset the impact of trade deals with Europe and the Trans-Pacific Partnership, but most is from the Economic Development Agency for Southern Ontario.
The announcement comes after Gay Lea announced in February, 2016, that it would invest $60 million in the plant, mainly to improve and expand skim milk powder production.
That was prompted mainly by a price break on milk pricing for products that would displace imports from the U.S., a move that was later undermined by a trade agreement with the United States.
