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Prime Minister Stephen Harper says moving the pay centre from Ottawa to Miramichi, N.B., will result in annual savings of up to $80 million a year once startup costs are recouped. ((Canadian Press))

Prime Minister Stephen Harper says the federal government will create 550 jobs by establishing a payroll centre in Miramichi, N.B.

Harper said the move of the pay centre from Ottawa to Miramichi will result in annual savings of up to $80 million a year once startup costs are recouped.

Harper said the new centre will create good-paying employment opportunities in the northern New Brunswick community that has been hard hit by job losses in recent years.

"You will be able to find a job here in Miramichi, a city anyone would love," the prime minister said.

The move fulfils a promise to replace any jobs lost as the Conservative government carries out its pledge to shut the long-gun registry headquartered in Miramichi.

Harper said the firearms centre "does more than just the long-gun registry" and the payroll centre move will absorb any job losses in the firearms centre "many times over."

Public Works Minister Rona Ambrose told the news conference in Miramichi that the government would recruit and train people in the region to work at the centre.

The new centre and jobs will allow "people in the community to stay in the community," Ambrose added.

Existing payroll system decades old

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The Conservatives have promised to replace any jobs lost at the Canadian Firearms Centre in Miramichi if the long-gun registry is abolished. ((CBC))

When the prime minister arrived in Miramichi, there was a small group protesting outside the firearms centre about job losses if the long-gun registry is abolished.

The existing payroll system is 40 years old and Harper said the Miramichi initiative is part of the federal government's "commitment to increase the effectiveness of public service operations and eliminate unnecessary costs."

The new Miramichi centre will replace the outdated and labour-intensive technology with a more modern system.

The system is expected to be fully implemented 2015-16.

The federal government anticipates it will spend $298 million in the next six years to set up the new system and it will recoup that investment by 2020.

Auditor General Sheila Fraser raised concerns in her spring 2010 report about the state of the government's payroll system.

The prime minister's advisory committee on the public service also indicated that updating the federal payroll system was a "top priority" in February 2009.