The Tk'emlúps te Secwépemc Indian Band in British Columbia's Interior and the Sechelt Indian Band on the province's central coast filed a statement of claim in Federal Court in a case they hope grows to include aboriginals from across the country.
The federal government reached a settlement to compensate residential school students in 2006, two years before Prime Minister Stephen Harper's historic apology in Parliament. But an automatic payment to former residential school students — described as a common experience payment — only applied to those who lived at the schools.
Students who attended the schools during the day and returned home at night, a group referred to as "day scholars," aren't eligible for those payments, which provide $10,000 for the first year spent living at a residential school and $3,000 for each subsequent year.
The class-action lawsuit argues day scholars should also be compensated for the cultural and psychological damage wrought by the schools.
"Many members of Canada's aboriginal communities were excluded from the agreement, not because they did not attend residential schools and suffer cultural, linguistic and social damage, but simply because they did not reside at residential schools," says the statement of claim.
"The exclusion of the (day scholars) reflects Canada's continued failure."
The residential schools settlement also provides for payments for specific, individual allegations of abuse by former residential students. Day scholars who suffered such abuse are eligible for those payments, each determined on a case-by-case basis.
The class-action suit seeks compensation for day scholars, their descendants and the two bands. It does not specify how much compensation they are seeking.
Shawn Atleo, national chief of the Assembly of First Nations, said aboriginal groups have been advocating for years that day scholars be given common experience payments to compensate them for their time at residential schools, but Ottawa has refused.
"It was a government assertion that they didn't suffer the same as residential school survivors," Atleo told reporters at a news conference announcing the lawsuit Wednesday.
"Whether day scholar or a resident, students received similar sorts of abuses and deep trauma."
Currently, the new lawsuit is limited to day scholars who attended one of two residential schools: the Kamloops Indian Residential School and the Sechelt Indian Residential School. The two bands involved in the lawsuit estimate there are currently 300 living former day scholars in their communities.
However, Atleo said the goal is to see the lawsuit eventually expand to include anyone in Canada who attended a residential school as a day scholar. He said several First Nations groups have already expressed interest, namely in Saskatchewan and Manitoba.
"We can see very strongly that this will grow," he said.
"This is really the initiation of this effort ... as day scholars in all regions of the country begin to express to their leaders the need to join with First Nations."
The Department of Aboriginal Affairs could not be reached for comment.
Another group excluded from the settlement launched a class-action lawsuit in 2009. That lawsuit involves students who attended day schools, which were separate from residential schools and did not have any students living on site.
Like day scholars, day school students weren't eligible for common experience payments under the residential schools settlement, but could make claims for specific allegations of abuse.
A report posted to the Department of Aboriginal Affairs' website indicates that, as of May of this year, 98 per cent of an estimated 80,000 common experience payments have been paid out.
The federal government established residential schools in the 1870s, eventually turning them over to various churches.
Native children were taken from their homes and put into schools where they were harshly punished and sometimes beaten for speaking their languages. The schools also produced horrifying stories of physical and sexual abuse at the hands of staff.
The last residential school closed in 1996.
The prime minister apologized for the legacy of the residential schools in 2008, acknowledging in Parliament that the schools were designed to "kill the Indian in the child."
The government also set up a Truth and Reconciliation Commission that will open next week and is to travel the country to hear stories about the impact of the schools.