Northern Peat Ltd. in Ellerslie will be receiving a $215,000 grant from the provincial government and a $200,000 loan from Ottawa to help pay for new equipment.
The big announcement was made Wednesday afternoon.
The specialized equipment will help improve the processing of peat moss products.
Federal Revenue Minister Gail Shea was on hand for the announcement.
"This allows [Northern Peat Ltd.] to make a much better product to meet the needs of their customers and therefore to sustain the jobs they do have and create a few more jobs in rural Canada," she said.
The company hopes this will allow it to develop new markets.
Tyne Valley-Linkletter MLA Paula Biggar said the deal is good for the province.
"They ship around the world, across Canada, they're looking to expand their markets and locally it provides a lot of local jobs but internationally it promotes Prince Edward Island," she said.
Northern Peat Ltd. has three locations on P.E.I. under its parent company, Nova Scotia's Annapolis Valley Peat Moss.
The company had been falling behind in sales as competing firms acquired better technology. Henry Endres, president of Northern Peat Ltd., said the company will use this new money to buy new equipment.
"We should be able to increase our market share considerably," said Endres, speaking about the increased amount of peat the company hopes to produce and put on the market.
That means the company will be able to hire additional workers with more specialized skills.
There's no shortage of work for the approximately 20 employees in the plant and out on the bog.
"We are going full tilt out here," said Glenn MacNevin, manager of Northern Peat Ltd. Northern Peat brings in about 250,000 bales per year.
This new equipment will allow them to bring in an additional 50,000 bales annually.
"At this location we need more tractors to keep up with the flow, we need more pickers, more — it's just as we grow bigger and the company grows bigger you've just got to keep [meeting] the demands," said MacNevin.
Northern Peat anticipates they'll need up to 10 more employees next year to keep up with production and estimates there's still 50 to 60 years worth of peat left on this land.