The Government of Canada began to play a role in the development and administration of Indian Residential Schools as early as 1874. The Government operated nearly every school as a joint venture with various religious organizations.

The schools were located in every province and territory except Newfoundland, New Brunswick and Prince Edward Island. Approximately 132 schools existed over time, and while most Indian Residential Schools ceased to operate by the mid-1970s, the last federally-run school in Canada closed in 1996. It is estimated that there are 80,000 former students alive today who attended the schools.

In order to attend Indian Residential Schools, Aboriginal children were removed from their homes, and often taken far from their families and communities. While at school, children were prevented from speaking their own languages and learning about their culture and heritage. It is not uncommon to hear some former students speak about the positive experience in these institutions; however, many former students suffered physical and sexual abuse. Dealing with the legacy left by the Indian Residential School system is an important aspect of Canada's relationship with Aboriginal people.

In May 2006, the Government announced the approval by all parties of the Indian Residential Schools Settlement Agreement (IRSSA). This was reached with the assistance of the Honourable Frank Iacobucci who worked with legal counsel for former students, legal counsel for Church entities, and other representatives of former students, including the Assembly of First Nations and the other National Aboriginal Organizations, to develop an agreement for a fair and lasting resolution of the legacy of Indian Residential Schools.

The Government also launched an Advance Payment program for eligible former Indian Residential School students who were 65 years of age or older on May 30, 2005, the day negotiations were initiated.

After the conclusion of a five month opt-out period, the IRSSA was approved by all the courts across Canada. Since fewer than 5,000 eligible former students opted-out of the IRSSA, the implementation of the IRSSA came into effect on September 19, 2007.

The IRSSA is the largest class action settlement in Canadian history. The IRSSA includes the following individual and collective measures to address the legacy of the Indian Residential School system:

• Common Experience Payment to be paid to all eligible former students who resided at a recognized Indian Residential School;
• Independent Assessment Process for claims of sexual and serious physical abuse;
• Truth and Reconciliation Commission;
• Commemoration Activities;
• Measures to support healing such as the Indian Residential Schools Resolution Health Support Program and an endowment to the Aboriginal Healing Foundation.