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The statement follows 'damning indictment' of last week by former Supreme Court justice John C Major report blaming a "cascading series of errors" by the Canadian government.
Twenty-five years after the Kanishka tragedy that claimed 329 lives, Canadian premier Stephen Harper today apologised for the "institutional failings" that led to the Air India bombing and took the first step towards providing compensation to the victims' families.
In an emotional speech marking the 25th anniversary of the attack, Harper said: "the mere fact of the destruction of Air India Flight 182 is the primary evidence that something went very, very wrong. For that, we are sorry.
"For that, and also for the years during which your legitimate need for answers and, indeed, for empathy, were treated with administrative disdain."
Harper's apology came less than a week after a damning report on the bombing by Kanishka Inquiry Commissioner justice John Major concluded that a "cascading series of errors" by police and authorities had led to the country's worst act of terrorism which could have been prevented.
The prime minister recommended that an independent commission be established to determine appropriate amounts of
compensation for the victims' families.
Air India Flight 182, Kanishka plunged into the Atlantic on June 23, 1985, after an explosion in the aircraft killing all 329 people on board.
Without naming Khalistan demand by a section of Sikh community in Canada, Harper said that his government was committed to marginalise extremists and would not allow them to use Canadian soil to export terrorism to India.
"It is incumbent upon us all, not to reach out to, but rather to marginalise, to carefully and systematically marginalise those extremists who seek to import the battles of India's past here and then to export them back to that great and forward-looking nation," he said at a function also attended by members of the victims' families and Canadian politicians.
"Whoever would lift up a perverse ideology by casting down the innocent- we must learn how to thwart them," he said.
Indian High Commissioner to Canada SM Gavai, Consul General of India Preeti Saran, former Supreme Court judge and chairman of Air India Inquiry Commission Justice John Major and Liberal leader Bob Rae were present on the occasion.
"Let me say that again; the finest memorial we can build to your loved ones is to prevent another flight 182," Harper said.
He stressed that it is not enough to say the system failed, as that would only "sanitise with words a succession of woeful inadequacies."
The prime minister regretted the years of shabby treatment the families faced at the hands of security agencies and other government offices.
For too long, he admitted, the disaster was seen wrongly by many Canadians as a foreign act with foreign victims.
"This atrocity was conceived in Canada, executed in Canada, by Canadian citizens, and its victims were themselves mostly citizens of Canada. We wish this realisation had gained common acceptance earlier," he said.
Harper said he makes no excuses for the "deeply disturbing" findings released last week by the Air India inquiry, which focused largely on bumbling by security services.
Tributes were paid and wreaths were laid at the Kanishka memorial by the prime minister Harper, Ontario premier Dalton McGuinty and Toronto Mayer David Miller and families of the victims.
In a message prime minister Manmohan Singh said: "This was a horrific incident which shook the world's conscience. It is with a sense of deep pain and sorrow that I join the families and friends in paying my homage to all those who fell victim to this most barbarous act of terrorism."
"No religion, faith or cause can justify such violence or inhumanity. On this solemn occasion, we must rededicate ourselves to fighting and eliminating terrorism and determination and joint action," Singh said.
Singh's message was readout by Bal Gupta, president of the Air India victims' families association.
The bombing attack was blamed on Sikh militants avenging Operation Blue Star of 1984.
Inderjit Singh Reyat, the only person ever convicted in the case, pleaded guilty to manslaughter in 2003.
Suspected ringleader Talwinder Singh Parmar died in India in 1991, and the two main surviving suspects — Ripudaman Singh Malik and Ajaib Singh Bagri — were both acquitted in March 2005 after a 19-month trial.
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