The federal government has announced a compensation package that will see a one-time payment of $20,000 awarded to people harmed by Agent Orange and other herbicides on a New Brunswick military base.

Defence Minister Peter MacKay and Veterans Affairs Minister Greg Thompson made the announcement at a news conference Wednesday in Fredericton, N.B., not far from Canadian Forces Base Gagetown.

There are several conditions attached to the funds:

The money will be given to veterans and civilians who worked on or lived within five kilometres from CFB Gagetown between the years of 1966 and 1967.

"They had not invited Agent Orange into their world and they didn't want it to become part of their lives, but it did," Thompson told the gathering on Wednesday.

They must have illnesses associated with Agent Orange to be eligible for compensation.

Those illnesses include Hodgkin's disease, lymphoma, respiratory cancers, prostate cancer and type 2 diabetes.

The primary caregiver of qualified candidates who have died after Feb. 6, 2006, will also be considered for compensation.

It is believed about 4,500 people will be applying for the compensation. The total cost of the program is $96 million.

The U.S. military used Gagetown as a testing ground for powerful chemicals such as Agent Orange and Agent Purple that causes leaves to fall off of plants. They tested them on a small section of the base for a period of seven days in 1966 and 1967. Federal officials insisted it was the only time the herbicides were ever sprayed in Canada.

More herbicides were used at Gagetown from the 1950s to the 1980s that were all laced with dioxin, a chemical that has been linked to a slew of health problems for people, including cancer. However, they were federally approved for use.

Since the 1980s, herbicides containing dioxins have been banned in Canada. However, there were some versions available commercially that were used in Gagetown as well as other places in Canada and around the world. It is commonly used for clearing brush around rail and power lines.

Nonetheless, people who fell ill from exposure to those herbicides will not be eligible for compensation.

The government says restricting the money to those exposed to Agent Orange was a tough decision, but one based on science.

"At the end of the day, what we're doing is fair and it's compassionate, and I believe it will bring a resolution to the issue on the base," said Thompson.

Package 'totally inadequate'

Ken Dobbie, head of the Agent Orange Association in Canada, called the package "totally inadequate" and said the fight is far from over.

"This package needs a massive overhaul, $20,000 is just not enough," he said, speaking with CTV Newsnet Wednesday afternoon. "We have people in our association and also in the class action that spend more than that in a year for prescription medications."

He said the best thing about the package is that it doesn't include any waivers, which means people could still get the funds and be able to take the matter to court.

"We'll continue to push for adequate compensation and also for a full public inquiry," he said. "In addition, we'll also continue in the courts for class action against the government.

The Opposition echoed Dobbie's comments, saying the government's announcement comes nowhere close to fulfilling its promise to veterans.

"They are making modest payments to a very limited group of people," Liberal MP Albina Guarnieri, the veterans affairs critic, said in a news release. "This contrasts sharply with the promise made by Stephen Harper in the last election of full and fair compensation for persons exposed to defoliant spraying from 1956-1984.

"After making a promise to 150 thousand veterans worth $3 billion, 97 per cent of at-risk veterans have been left out."

Studies find herbicides not a major threat

But several studies have found that, in fact, the herbicides posed less of a threat than believed and have a minimal impact on local residents and those involved in spraying the herbicide.

The studies found that generally, the people at the greatest risk were those directly involved in mixing, applying and clearing brush during the spray applications.

Furthermore, a study by environmental researchers in Ontario found that the number of people dying or suffering from cancer near Gagetown is comparable to the number of people with the disease in all of New Brunswick.

The study also found that men in Gagetown have a slightly reduced risk of dying from cancer compared to men living in the rest of the province. The finding shocked veterans.

"It's for sure not everybody is going to be covered ... but I believe that all the people that are sick and have something wrong with them will be covered,'' said Dobbie. "We want an extension on this for people who will get sick after this is over with."

With a report from CTV Atlantic's Andy Campbell and files from The Canadian Press