BACKGROUND Since the late 1980s, British Columbia (BC) Canada has been undergoing a process of regionalization of health services which includes decentralization and the demand for self-sufficiency with respect to caring for people with mental health issues. In BC, regionalization has meant the continued downsizing of its one large provincial psychiatric hospital Riverview, which has resulted in relocating patients from this hospital to cities and towns throughout BC, and the establishment and/or renovation of psychiatric tertiary-care facilities to treat local community members who experience mental ill health. In the context of the relocation of psychiatric tertiary care, communities in northern BC face the specific challenge of having to provide these specialized services in remote settings, not only for people transferred from Riverview, but also for the increasing number of people 'aging-in-place' in a region that has the fastest growth of older adults in BC. Little is known about the capacity of these remote communities to manage change, develop broader models of care, and integrate people with psychogeriatric mental health issues with residents at existing facilities. METHODS This study employed a qualitative research design which involved field research in the rural community where people were transferred, and interviews and focus groups with key people involved in the transfer process. In the analysis of the data a gender-based lens was applied to clarify the differing needs and concerns of male and female patients and to attend to possible needs relating to culture and ethnicity. RESULTS The findings illustrate persistent 'hinterland-metropolis' and 'front-line versus administrative staff' tensions, with respect to resource distribution and top-down governance, and demonstrate the need for more transparent and comprehensive planning by health authorities with respect to instituting mental health reforms in a northern context, as well as improved communication between administrative and front-line staff. The research suggests that it is important to attend to the differing needs of women and men in the context of psychogeriatric care, as well as to other factors such as ethnicity and culture, in order to provide appropriate care. Finally, building community capacity to deal with the complex needs of patients is severely hampered not only by facility and regional health authority staff turnover, but also the stresses inherent to working in northern communities which include geographic, social and economic challenges. CONCLUSIONS Increased local engagement is a way to identify and address challenges related to relocating psychogeriatric care to northern and remote settings, and to enhance psychogeriatric care provision in similar locales. While provincial and regional level 'big picture' planning is a necessity, study participants highlighted the critical role of local perspective and expertise.