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For the modern-day price of a camping hatchet at Canadian Tire, the British slid Toronto out from under the Mississauga Indians in 1805.

The 101,528 hectares went on to form Canada's largest city and a good chunk of its suburbs, while the Mississaugas wound up on 2,393 hectares south of Hamilton.

Needless to say, the deal left a bad taste, but a federal government offer of $145-million could soon cleanse the palates of the 1,800 members of the Mississaugas of the New Credit First Nation. If they accept the offer, it will be the largest single land-claim settlement in Canadian history.

"It's a good start for us and it prepares us for the future," Chief Bryan LaForme, who leads the First Nation near Hagersville, Ont., told a crowd at a local high school on Monday, where Indian Affairs Minister Chuck Strahl announced the offer.

If accepted by band members in the coming months, the payment will also cover a claim on the much smaller, 1,400-hectare Brant Tract on Burlington Bay, along Lake Ontario between Toronto and Hamilton.

The Mississaugas filed two claims in the late 1980s. Ottawa spurned talks until 2003, when negotiations leading to Monday's announcement began.

The Toronto Purchase, as it came to be known, dates to a 1787 meeting at Tyendinaga, near what is now Belleville. In appreciation for the Mississaugas' military support during the American Revolution, British officials gave them "presents" of weapons, tools and other goods.

At the time, the British were looking for link from Lake Ontario to Lake Huron that avoided the American troops at Detroit. The Mississaugas could have provided it with a route up the Humber River, overland via portage to Lake Simcoe and on to Georgian Bay, but land talks ended in dispute.

Kim Fullerton, lawyer for the Mississaugas, said the British went ahead and settled York (later Toronto), and "it wasn't until the 1790s that the head of the Upper Canada government pulled out the old deed and said 'Holy crap,' " he said, most likely paraphrasing. "There was no description of the land surrendered ... and they really didn't know what to do."

An 1805 meeting with new Mississauga chiefs ended in a sketchy transaction whereby the British claimed they had bought twice as much territory as was actually discussed in 1787. Oblivious to the substance of those previous talks, the new chiefs chose to trust them, but asked for a small sum as a confirmation of good faith.

"That's when the British came back the next day and gave them 10 shillings," Mr. Fullerton said. "It's about two bucks ... and two bucks was worth more then than it is now, but it's still two bucks."

Or about $27 in current Canadian dollars.

While Ottawa's offer of $145-million is exponentially less than the billions Greater Toronto would fetch today, the question was "what should the British Crown have paid them in 1805" and "how do you bring that amount forward to today's dollars?" the lawyer said.

Mr. Strahl's sum, while lower than hoped, "is a substantial offer and one that merits consideration by the members."

More broadly, Mr. Fullerton said, "People living in Toronto can presumably hold their heads high now ... and say, 'We can have a little bit more pride in the foundation of our city.' "

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