Canada has reached an agreement to settle a class-action lawsuit, seeking compensation for the loss of language and culture brought on by indigenous residential schools, for C$2.8 billion (US$2.09 billion).

The settlement builds on the 2021 Gottfriedson Day Scholars settlement, that provided individual compensation to day pupils who attended a residential school but did not live at the institution.

Canada will provide the settlement amount to a non-profit trust, independent of the government, as part of the class settlement.

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The organisation charged with administering the trust will be governed by a permanent board consisting of nine indigenous directors, the government said in a statement.