A little piece of Bermuda in Canada - that is what Butterfield Bank's financial services operation in Halifax, Nova Scotia is all about.

The bank set up its fund administration centre to support the main business in Bermuda and the Cayman Islands right on Halifax's waterfront in March and has not looked back ever since.

And managing director of Butterfield Fund Services Sylvain Lacoursiere reckons the favourable business environment in the Nova Scotian capital and close links to Bermuda will see it grow from strength to strength.

One of the main driving forces behind the move to Halifax was to maintain and expand its market share of the hedge fund industry, according to Mr. Lacoursiere.

"There is a lot of growth in the hedge fund industry right now," he said.

"It is in the trillions of dollars in assets and hedge fund administration, and obviously we needed a large space for expansion and resources as well, so putting our feet on-shore was a must.

"The likes of the Bank of Butterfield and CITCO already have on-shore operations and for us it was just a question that in order to grow and tackle the market the same way those guys were and to get and share the growth of the industry, we needed to have access to a lot of resources such as universities, large office space available and much cheaper costs to operate here.

"In Bermuda it is very difficult to get office space - you would have to build a new building for your requirements.

"So, an on-shore office was one thing we needed to do to participate in the growth of the hedge fund industry."This industry is supposed to double, triple and even quadruple over the next few years and we need to do the same in terms of growth.

"If we only keep our market share in the growth of the hedge fund industry, we would need to a lot of staff to keep up with that.

"Discussions on the establishment of a new office in the capital of Nova Scotia started last year and with a 30-strong staff base currently working in the 22 square feet premises, BFS plans to take on a further 40 to 45 employees next year, with the design by Bermudian architects Shy Arch expected to be fully implemented and constructed in time for Christmas, said Mr. Lacoursiere.

"Most of the discussions as to where we were going to set up were taken by the chief financial officer and president of Butterfield Bank," he said.

"One other factor behind the move was to have a disaster recovery plan and contingency for our off-shore bases in Bermuda and the Cayman Islands."Bermuda and the Cayman Islands can be hit by a hurricane and we can help to shift things around and offer flexibility in those circumstances.

"That is one reason we have a large office space - we want to set up the board rooms so that if we need to fold away tables and make space there and if we need to move people quickly from off-shore to here we can do."It also has a close proximity to Bermuda - it takes one or two-and-a-half hours to get here by plane, so it is a good contingency or disaster recovery place.

"It also gives reassurance to clients. It is good to have an on-shore location.

"The services BFS offers primarily include accounting services supporting clients that its Bermuda and Cayman Islands operations develop, dealing with a whopping $7 billion under administration alone out of the bank's total of $141 billion.

"That is why it is so important to have interaction with Bermuda and the Cayman Islands, so that is why we act as an extension of the Bermuda operation," said Mr. Lacoursiere.

"My link to Bermuda is really to support the operation from an accounting point of view.

"Most of the hedge funds are domiciled off-shore in Bermuda and the Cayman Islands, so from my perspective everything is done in those areas and they outsource the accounting to us so that is where we help the group in that way."

But Mr. Lacoursiere, who worked in Bermuda for five years himself before moving back to Canada, was quick to dismiss the argument that outsourcing is simply taking jobs away from Bermuda and that it actually makes good financial sense.

"It is a question of being able to participate in the growth of the industry and to expand our business," he said.

"Butterfield Bank benefits in that we have an operation here, it is a Bermuda company and at some point we need to go much larger and I think that is what we are trying to do here, to grow a big market share.

"In fact, in addition to Mr. Lacoursiere's connection, BFS has a number of links to Bermuda such as Bermudian staff already on its books and they are always on the lookout for qualified Bermudian accountants and facilitating students from the Island, as he explained.

"We also have another two senior managers with us, one who was in Bermuda for six years and one in Cayman for seven or eight years," he said.

"So now that we have a location here in Canada I can still contribute to the benefit of the bank being here and the bank invested a lot of time and money in us and now to be able to keep that expertise is of tremendous value to the bank.

"We also help in terms of creating opportunities for Bermudians that want to work here - the number of resumes from people I have received is about 75 to 80, it is unbelievable how great the demand is.

"One of the top managers here is Bermudian and his wife is Canadian and there are other examples. I was talking with a young Bermudian already working for BFS in Bermuda and he wants to move back to Halifax because he studied here and he has friends here.

"There are Bermudians that want to learn the on-shore experience of work and this is a good opportunity for them.

"Another example of things that benefit Bermuda is one of the young students has worked at BFS, but hadn't completed her degree, so she came down to Halifax to complete her degree and she worked at BFS here for some extra income, so we do offer flexibility as well.

"One of the other big draws to being based in Halifax is a below 10 percent rebate on payroll tax for hitting job targets, but according to Mr. Lacoursiere, it is just one of the many contributing factors to BFS housing its operations here, alongside a good working relationship with the Nova Scotia government and other businesses in the area, allied to the rich labour force and facilities they can tap into.

"It does help," he admitted. "But, the main reasons for us to be here is the labour force and the number of qualified accountants and universities and the low cost in terms of office space.

"Generally and historically there are a lot of maritimers (Nova Scotians) in Bermuda and there are a lot of connections with maritimers and Bermudians.

"I think that most Bermudians that study at university come here to Halifax and, in fact, I would say it is hundreds of Bermudians coming to study here.

"The government and businesses here work very well with us and they really help us in terms of implementing a business here.

"There are the tax incentives on top of that and the government are trying to help create good jobs and trying to facilitate us here."