VW agrees to spend up to $1.6 billion on Canada emissions settlement

WASHINGTON -- Volkswagen Group has agreed to spend up to C$2.1 billion ($1.6 billion) to buy back or fix 105,000 polluting diesels and compensate owners in Canada.

In June, Volkswagen agreed to a similar deal with U.S. owners, in which it would spend about $10 billion to buy back or fix 475,000 U.S. vehicles. In total, the company has now agreed to spend to date more than $18 billion to address diesel emissions issues in North America. The automaker still faces more costs to address larger vehicles and U.S. fines.

Volkswagen also agreed to pay a C$15 million civil administrative monetary penalty in connection with the Canadian settlement.

"Volkswagen's primary goal has always been to ensure our Canadian customers are treated fairly, and we believe that this proposed resolution achieves this aim," Volkswagen Group Canada CEO Maria Stenstroem said on Monday.

Two Canadian courts will hold approval hearings around the end of March. Volkswagen will pay legal fees to the suing owners' lawyers separately from the settlement fund.

Most of the 105,000 Canadian owners will get between C$5,100 and C$5,950 in compensation in addition to the value of the vehicle or they get the vehicle repaired.

Volkswagen is expected to announce a deal on Tuesday to address another 80,000 polluting 3.0-liter vehicles in the U.S. Reuters reported Friday that deal will include Volkswagen's agreement to spend more than $200 million to offset additional excess U.S. diesel pollution and offer to buyback about 20,000 of the polluting vehicles, while fixing the other 60,000.

Volkswagen could face billions of dollars in additional U.S. fines to resolve an ongoing criminal investigation and federal and state environmental claims.