The Senate has put the federal Liberals in the awkward position of having to preserve provisions of the Indian Act that discriminate against Indigenous women and prevent as many as two million Canadians from qualifying for the benefits that go with Indian status.

When the government introduced Bill S-3, legislation to amend the Indian Act, in the Senate last October, it intended to eliminate enough of the discriminatory provisions from the act to meet the demands of a court ruling that the act violated the Canadian Charter of Rights and Freedoms.

But the senators said, and the government agreed, that the bill as written would not remove all of the provisions that make it easier for some First Nations men to pass along their Indian status to their descendants than for women.

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So the Senate's standing committee on Aboriginal Peoples approved an amendment to the legislation put forward by independent Senator Marilou McPhedran that would eliminate the other sexist provisions as well. And, on Thursday afternoon, the amended bill was passed by the Senate as a whole.

It is now going back to the House of Commons. Indigenous Affairs Minister Carolyn Bennett has said the government cannot accept the amendment.

Dr. Bennett has instead promised that if the bill is passed in a form that is acceptable to the government in time to meet the court's deadline of July 3, she will engage in a second phase of consultation to examine what else can and should be done to make the act less discriminatory.

"The collaborative process under Stage II will be launched after Bill S-3 is passed," a spokeswoman for the minister said on Thursday. "This will open the door for comprehensive consultations and collaborative work with First Nations, Indigenous organizations and individuals on the broader issues relating to Indian registration, band membership and citizenship."

But, in the meantime, the government that came to power promising not just a better relationship with Canada's Indigenous people but also a more gender-inclusive approach to governing will have to stick with some of the sexism in the act or face enormous new costs.

An official with the Indigenous Affairs department told the Senate committee that eliminating all of the sex-based discrimination could increase the number of people who have Indian status by 80,000 to two million. Canada had fewer than 700,000 status Indians at the time of the 2011 census. Each is entitled to such things as tax breaks, supplementary health benefits and money for postsecondary education.

But Ms. McPhedran said the government should not accept sexism.

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"This gives the government the opportunity to fulfill their constitutional and international human-rights obligations they have promised, including less than a year ago, when Minister Bennett went to the United Nations in New York and promised that she would fulfill all of the commitments of the Declaration on the Rights of Indigenous Peoples," Ms. McPhedran said after the amended bill was passed in the Senate. That declaration contains an article that calls for the equality of Indigenous men and women, she said.

As the Indian Act is currently written, First Nations men who married non-status women before April 17, 1985 – when the act was rewritten to comply with the Charter of Rights and Freedoms – will always pass their Indian status to at least their grandchildren and in many cases to their great-grandchildren. This is allowed even if their children and grandchildren have families of their own with non-Indians. However, First Nations women who married non-status men before 1985 can pass on their status only up to their grandchildren, unless those grandchildren become parents with other status Indians.

Ms. McPhedran's amendment to Bill S-3 is intended to eliminate any remaining distinctions between the descendants of men and women who married non-Indians before the Charter. It would go back to the creation of the Indian Act in the 1800s, while the government wants to stop at those born after the Indian Register was created in 1951.

"This is a problem created entirely by federal governments," the senator said. "It's up to federal governments to fix it."

The quest for equality in the Indian Act has been driven by people such as Sharon McIvor, a B.C. lawyer and activist who brought a constitutional challenge over the sex discrimination that reached the B.C. Court of Appeal in 2009.

The B.C. Supreme Court had ruled that the Indian Act did violate the Charter. But, when the federal government appealed, the B.C. Court of Appeal ruled that, although the Indian Act was discriminatory, the bulk of the discrimination was justified because the purpose was to preserve the existing rights of the Indigenous men and their descendants.

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Before Bill S-3 went to the final vote in the Senate, Ms. McIvor wrote a lengthy and impassioned letter to all senators asking them to pass it with Ms. McPhedran's amendment.

"Your support for this amendment," she wrote, "is fundamentally important to creating a new day for Indigenous women – a day when I and other Indigenous women can say, at last, we are equal persons in dignity and rights in Canada."