For a long time now, Prime Minister Paul Martin has made it clear that he has no difficulty dealing with the provinces and regions as separate entities.
The latest and most dramatic expression of that policy direction was the decision to allow a side arrangement for Quebec following the recent health-care deal.

Many thoughtful Canadians argue that such an approach weakens the role of the federal government - by fragmenting its authority over the country's policy direction. However, there is an element to this policy that could offer enormous benefits to the public perception of the federal government and the role it plays in every region of Canada.

For too long now, bureaucratic power has been tightly centralized in the hands of a small group of institutions concentrated in the national capital region. Now is the time for the Government of Canada to seize the opportunity to relocate federal departments, agencies and Crown corporations from Ottawa to the regions of Canada.

The proposal to relocate the Canadian Tourism Commission, an agency of less that 100 employees, from Ottawa to Vancouver, should only be the beginning of a much larger government-wide decentralization program.

The initial upfront costs of relocation would be recouped many times over, in many different ways. The regions receiving the relocation would secure well- paying, permanent positions, reducing the need for ongoing regional development. In turn, the affected departments or agencies reduce staff turnover, saving recruitment and training costs. At the same time, the Government of Canada would have a permanent and strong presence in the area, helping to reduce the stresses of regional alienation.

Relocation should be done, not only as an economic development tool, but because it is a logical move that better reflects the challenges of a geographically vast and diverse nation.

For example, the National Energy Board was relocated to Calgary many years ago and is now closer to energy production. Why then, is the Export Development Corporation currently located in Ottawa? It could be situated in Vancouver; after all, Canada does more than $20 billion of trade with the state of California alone.

Does it make sense for the employees of the Department of Fisheries and Oceans to locate themselves in downtown Ottawa, where they cannot see a harbour or a fishing boat? Or does it make more sense for them to be located on one of Canada's coasts, where they can see the impact of their decisions on fishing communities and their residents more directly?

The challenge for Prime Minister Martin is the confrontation he will encounter from the entrenched and outdated view that important work can only be done in Ottawa. This antiquated notion is clearly dispelled by current communication technologies, which allow far greater flexibility to all modern organizations.

The reluctance to pursue decentralization was compounded during the period of federal fiscal constraint that began in February of 1995. That year, the federal budget announced government-wide plans to eliminate programs and consequently decrease the size of the government workforce. This effort to eliminate the deficit was financially successful, but the employment results left the regions of Canada absorbing a larger percentage of the federal Public Service reductions than the national capital region.

According to the Treasury Board website, provinces like Manitoba and British Columbia lost thousands of federal public service jobs while employment in the national capital region remained constant. At the highest executive levels of the public service (Ex. 1 to Ex. 5), the Ottawa area has continued to hold 70 per cent of positions from 1994 to 2003.

Looking abroad, British Prime Minister Tony Blair announced in his spring budget of 2004 the relocation of 20,000 public servants from London to the regions of the United Kingdom. In 2003, the Norwegian government announced plans to move eight state regulatory agencies outside of its capital.

But we do not need to look overseas for inspiration or beneficial impact. There is a precedent in Canada, and it is in Charlottetown, at Veterans Affairs. In 1976, Dan MacDonald, then minister of Veterans Affairs and Jean Chretien, then president of the federal Treasury Board, announced the relocation of the national headquarter of the federal Department of Veterans Affairs to Charlottetown.

This progressive decision resulted in a great deal of resistance, including the then mayor of Ottawa who called the relocation a "mindless action". However, nearly 30 years later, the benefits to Prince Edward Island are enormous.

The economic benefits of relocating the headquarters of Veterans Affairs to Charlottetown include: 1,200 fulltime jobs; a $68-million yearly payroll; many student jobs during the summer; and a career path for future generations who want to stay in the region.

Beyond the economic contribution, the presence of Veterans Affairs has also made a significant contribution socially. It has broadened Prince Edward Island society to include a vast array of highly trained professional public servants who contribute their every working day to public affairs and to Prince Edward Island society.

Perhaps the clearest indication of that contribution has been the remarkable growth in the use of the French language. Prince Edward Island has always had a thriving Acadian community, but the addition of Veterans Affairs has deepened the role of the French language to a new level. According to Statistics Canada, Prince Edward Island is now ranked third among the provinces in terms of knowledge of both languages. There is no doubt that the strength of the Acadian community assisted in that regard, but the greatest single contribution to the improvement is the presence of Veterans Affairs. Unfortunately, the intense controversy surrounding the relocation of Veterans Affairs forced the national decentralization programs to be quietly dropped. When the dust cleared, Veterans Affairs was, and remains today, the only federal department with its national headquarters located outside of Ottawa.

Other prime ministers have made progress in decentralizing the national government to the regions of Canada. I would like to acknowledge the work of the Right Honourable Brian Mulroney, who established the GST Centre in Summerside. Now it is time for Prime Minister Paul Martin to restart the decentralization program and give the other regions of Canada the same opportunities and benefits enjoyed by Prince Edward Island over the past 28 years.