In a move hailed by one native leader as a "turning point in the history of our nation," Canada on Wednesday formalized a landmark compensation deal for an estimated 80,000 former residential school students.

The country's largest-ever class-action settlement came into effect, ending what Assembly of First Nations Chief Phil Fontaine called a 150-year "journey of tears, hardship and pain — but also of tremendous struggle and accomplishment."

Phil Fontaine, national chief of the Assembly of First Nations, Phil Fontaine, said that a federal compensation deal for former students of residential schools marked the end of a 'journey of tears.'
(Wayne Glowacki/Canadian Press)

Wednesday was the first day application forms were made available to former students, some of whom have been waiting for decades to be compensated for their experience at the schools. People were lining up at the Assembly of Manitoba Chiefs office in Winnipeg to receive their forms.

Speaking in Winnipeg for the ceremony to officially implement the federal Indian Residential Schools Settlement Agreement, Fontaine said he was overcome with grief, joy and hope.

"This is an important day. It is a day of celebration. It is a perhaps — and I don't want to overstate this — even a turning point in the history of our nation," he said.

Thousands of the former students say they endured sexual, physical and psychological abuse while attending the schools, which were run by churches and funded by the federal government from the 1870s until the mid-1970s.

The federal government-approved agreement will provide at least $1.9 billion to the former students who had attended 130 schools.

Fontaine said history would enshrine the moment now that the government has made a "symbolic" acknowledgment of its sad past with an attempt to reconcile. An official apology from Prime Minister Stephen Harper was next in Canada's "coming-of-age" story, Fontaine predicted.

"I have no doubt about this," he said.

'Sad chapter of history in Canada'

It will take more than a month to process all the applications expected to come in, said Valérie Haché of the federal government's Indian Residential Schools Resolution Canada agency.

Claimants for the "common experience" money, which all former students are eligible to receive, can expect to get the first cheques within a month, she said.

Indian Affairs Minister Chuck Strahl said he hoped the money would "close this sad chapter of history in Canada."

Payments are expected to average about $28,000 for each applicant.

In anticipation of the formalizing of the agreement in Winnipeg, RCMP across Canada were on guard for potential predators who might attempt to scam the elderly out of their lump sums. There were also worries that with a windfall of new money, native communities could see a spike in alcoholism or drug abuse.

Recognizing the concerns, Fontaine broke from his speech momentarily and addressed the audience of former students, politicians and reporters.

'Tone of racism'

"Look, I've read too much in the last few days about the money, and what it means to the survivors and what might befall our people," he said.

"And I sense a tone of racism to all of those concerns. This money belongs to the survivors. What they do with that money is their business," he said to applause.

Jennifer Wood, the Assembly of First Nations' compensation co-ordinator, said some social problems could be expected to arise from the influx of money.

"But there have also been positive impacts," she said. "There are survivors who are planning to invest their dollars, they're planning to provide for their children, they're planning to develop businesses in their communities."

Still, not all survivors have opted to take the lump sum. A group of about 200 people who endured very serious abuse and trauma have rejected the cash, choosing instead to take the federal government and religious organizations to court for running the institutions.

Many people who have said the financial compensation cannot heal their emotional wounds can seek support from a truth and reconciliation commission, which was set up as part of the settlement agreement process. It allows people to share their experiences in the schools and put them on the record.