KITCHENER, Ont. - Prime Minister Stephen Harper announced the launch Thursday of a regional development agency in southern Ontario, one of the areas hardest hit by the economic downturn.

The agency, which was previously announced in the federal budget, will be headquartered in Kitchener.

The Federal Economic Development Agency for Southern Ontario has a $1-billion budget over five years.

"Our objective is not to tie up the programming funds here in the head office or in a bunch of regional offices," Harper said.

"We want as much of the money available for programming and as little on bureaucracy as we possibly can have."

Minister of State Gary Goodyear will be responsible for the agency and will embark on a tour of the region in the coming weeks, Harper said.

"The goal was really quite simple - to have a fairly central location that wasn't in the (Greater Toronto Area)," Harper told a news conference in the southwestern Ontario city.

"Kitchener fit that bill as well as any."

Ontario has shed more than 200,000 manufacturing jobs in recent years.

When the agency was announced in January, The Canadian Taxpayers Federation said it amounted to little more than pork-barrel politics.

Critics have pointed to failings in similar agencies - most notably the Atlantic Canada Opportunities Agency - which Harper criticized when he was in opposition.

Ontario Premier Dalton McGuinty has applauded Ottawa's move to create the agency.

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