OTTAWA - The families who lost loved ones in the 1985 Air India bombing say they deserve a public apology from the federal government and a second shot at financial compensation for their suffering.

Lawyers for the victims' relatives, in closing arguments at a public inquiry on Friday, also called on Ottawa to fund a new centre for national security studies as a "living memorial'' to the 329 people who died when Air India Flight 182 was downed by a terrorist bomb.

And with an eye to the future, they urged reforms in the way police, intelligence officers, prosecutors and judges deal with terrorist cases from now on.

"This is an opportunity for Canada to get it right,'' said lawyer Jacques Shore. "This is an opportunity for Canada to be a beacon to the world.''

The inquiry, headed by former Supreme Court judge John Major, has spent 17 months assessing why federal authorities failed to head off the worst mass murder in Canadian history and couldn't obtain criminal convictions against most of the perpetrators.

Given the "institutional failures'' that have come to light, the government should issue a formal apology, said Norm Boxall, another member of the families' legal team.

He pointed, in particular, to the strained relations and turf wars between the RCMP and the Canadian Security Intelligence Service that "detrimentally affected the post-bombing criminal investigation and prosecution.''

Boxall also called for a review of the monetary compensation paid to families, saying new evidence at the inquiry makes it clear the claimants were at a disadvantage in negotiating their original settlements.

"Families were prejudiced in their civil actions against the government by not having all the information,'' Boxall maintained.

Major's terms of reference preclude him from finding any civil liability on Ottawa's part. But he noted all the same, in an interim report released in December, that past settlements varied widely, and some families have long complained they got nothing at all.

Shore, speaking outside the hearing room Friday, wouldn't speculate on whether new lawsuits could be launched if the government refuses to voluntarily review the matter.

"We've not taken any steps or addressed that at all,'' he said. "Eventually it will be up to the families to determine if they wish to do anything.''

Major has set no date for a final report in which he is expected to propose changes to intelligence gathering, policing and aviation security practices.

He will also address the need for legal reforms in the conduct of terrorist trials, better protection of witnesses who fear retaliation, and new ways to combat terrorist financing.

In their submissions Friday, the lawyers for the families urged him to consider a wide range of options including:

  • Creation of new federal post of national security co-ordinator to sort out disputes between the RCMP and CSIS.
  • Changes in the way CSIS gathers intelligence -- at least in some cases -- to make it admissible as evidence in court.
  • Legal reforms to protect the identity of CSIS officers called on to testify in court cases.
  • Requiring major terrorist cases to be heard by a three-judge panel, or by a judge and jury, but never by a single judge sitting without a jury.
  • Better screening not only of airline passengers, but also of cargo destined for the plane's hold.
  • Closer oversight of charities and non-profit groups to ensure they don't become a vehicles for terrorist financing.

Bal Gupta, a Toronto engineer who lost his wife aboard Flight 182 and spent years campaigning for a public inquiry, expressed hope the government will heed the call for action.

"If this inquiry comes up with the steps which will prevent a recurrence of similar tragedies in future, those lives were not lost in vain,'' said Gupta.

"I think that's the only (way) we may be able to feel better at the end of the day.''

Government lawyers offered no response Friday. They will make their closing submission to Major in writing by the end of the month.

The downing of Flight 182 has long been blamed on Sikh militants who used Canada as a base for their campaign against the Indian government.

But only one person has ever been convicted in the plot. Another was killed by police in India in 1992 and two more were acquitted at trial in Vancouver in 2005.