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Manitoba businessman Raymond Garand who traces his background to the marriage of a French fur trader and a native woman of the Northwest.John Woods/The Globe and Mail

On the one hand it looks like a mere change in definition: the expansion of a category – Indian – that most Canadians, including Indians themselves, dislike.

But a federal court ruling this week that Métis and non-status Indians should be treated as Indians under the law is much more than a semantic shift.

It's already causing some identity confusion in aboriginal communities and observers suggest it could have far-reaching financial, social and political implications.

It all centres around Indianness. The word itself fell out of use years ago but still holds tremendous legal significance because of its presence in the Constitution of 1867 and in the Indian Act, which governs relations with those who hold Indian status.

Under Canadian law there are Indians and there are non-Indians, citizens and citizens plus, each governed by different arrangements. After this court decision, a handful of diverse groups that once defined themselves in contrast to one another now find themselves re-categorized under a single umbrella. Their differences still exist, but they are in one way united, at least for now.

In practical terms, the court decision is likely to cost the federal government billions. Ottawa will have to assume responsibility for health and education funding for as many as a million more people. Health-care funding is an argument that will be fought over by federal and provincial governments. But on education, Métis and non-status Indians may now qualify for postsecondary tuition grants and may be exempt from certain forms of taxation.

Those changes will create an additional incentive to discover and explore Métis or native roots, which is likely to further increase the size and strength of Canada's aboriginal population. David McNab, a Métis historian, said he thinks the aboriginal population could approach three million people in a few years, up from a little more than a million today (1.7 million claim aboriginal ethnic origin), given how many people could legitimately claim aboriginal ancestry. It will also pave the way for the creation of new and more powerful political bodies for Métis and non-status Indians, according to Queen's professor and retired Ardoch Algonquin chief Bob Lovelace.

How all of this unfolds will in many cases boil down to the thorny question of identity and belonging. Defining who is Métis, for example, is something that has proved of great interest to the federal government and to the Métis themselves. Between 1996 and 2006, the number of Métis in Canada almost doubled, to 400,000, a figure that defies any normal path of demographic growth but was likely fuelled by a growing acceptance and pride in aboriginal identity.

For the last year, the Senate Committee on Aboriginal Peoples has held hearings across the country on the legal and political recognition of Métis identity. And in 2011 a storm of controversy erupted when the federal government hired the Canadian Standards Association, better known for assessing product safety, to evaluate Métis organizations' rules for determining Métis identity. David Chartrand, president of the Manitoba Métis Federation and vice-president of the Métis National Council, raised loud objections that forced the government to back off.

"We didn't want the CSA coming forward to stamp us and decide who we were," Mr. Chartrand said.

But there is a sharp divide about who should be called Métis. Mr. Chartrand and the Métis National Council believe the term applies only to those with a historical connection to the Métis homeland, a geographic area that stretches from the northern Great Lakes to the Rockies. Others, including the Congress of Aboriginal Peoples, believe it's a much broader term that can apply to other people of mixed native and European background across Canada.

The court judgment itself defines the Métis and non-status Indians as "a group of native people who maintained a strong affinity for their Indian heritage without possessing Indian status. Their "Indianness" was based on self identification and group recognition."

Jean Teillet, a prominent Métis lawyer, calls that part of the judgment "brutal and wrong in every way."

"[The judge] virtually erased the Métis nation," Ms. Teillet said. "He's just said 'You don't mean anything. All you are is people who care about your Indian heritage.' "

The decision was puzzling to many other Métis, too. They have fought for years to be recognized in their own right, including in the constitutional amendment of 1982, and did not see their identity in terms of their "Indianness." Now dozens are calling their leadership, Mr. Chartrand said, wondering whether they have become Indians overnight, and whether they will now be governed by the Indian Act. Mr. Chartrand vowed that will never happen.

Manitoba businessman Raymond Garand was both happy and confused when he heard the news of the court judgment, he said. Mr. Garand, who traces his family background to the marriage of a French fur trader and a native woman of the Northwest, said being classified an Indian left a somewhat sour taste in his mouth. It's just a word, he said, but it doesn't feel right.

"We're not really Indians. We're Métis," he said. "It's very strange."