Canada has begun talking to the families of the 329 victims of the Kanishka bombing about financial compensation as it tries bring to closure the 25-year-old terror case, the worst in country's history.

Canadian public safety minister Vic Toews and citizenship and immigration minister Jason Kenney sent a letter last week to families whose loved ones died in the 1985 bombing of Air India Flight 182 in which all 329 people were killed when the Boeing 747 crashed into the Atlantic Ocean.

The 329 included 280 Canadian citizens, mostly of Indian birth or descent, and 22 Indians.

The letter discusses the possibility of the families getting an "ex-gratia payment," which was one of the proposals made in June by the commissioner of the Air India inquiry, Justice John Major, according to National Post.

Three previous such payments are cited in the ministers' three-page letter: the USD 21,000 paid to families of Japanese internment during the Second World War; USD 24,000 to victims of chemical weapons testing; and USD 20,000 paid over the Chinese head tax.

The ministers' letter says ex-gratia payments are "made in the public interest where there is no obligation or legal liability to do so."

It notes that "no two situations are alike" and that the examples of previous payments were provided only "to give a sense of government action related to ex gratia payments."

The government met with some family members in Toronto on October 22 to talk about the Major Commission Report. Kenney told the group Ottawa wanted to make a "symbolic gesture".

He said Cabinet had not discussed the payment but hoped to resolve the matter by Christmas, while Toews said he did not want to raise expectations about the money.

Last week, sentencing hearings were held for Inderjit Singh Reyat, the only man ever convicted over the attacks.

He faces up to 14 years for repeatedly lying at the trial of Ajiab Singh Bagri and Ripudaman Singh Malik, who were both acquitted.

Meanwhile, the daughter of one victim has said that she is disappointed by the dollar figures officials have mentioned.

"Twenty-thousand dollars is an insult," Esther Venketeswaran, whose father, T K Venketeswaran, an Atomic Energy of Canada employee, was among those killed in the attack, wrote in a reply to public safety Canada.