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The inter-generational loss of Indigenous identity in Canada has been a result of Canadian Aboriginal policy in the past and present. The policies of the residential school era and the policies of today’s child welfare system lead to similar outcomes, particularly governmental determination of how the next generation of First Nations people are affected by the state. By 1997-1998, the Department of Indian and Native Affairs reported that First Nations child and family services were administering services to 70% of children on reserves, and that number was projected to increase to 91% by 2002. In 1940 when the residential school system was still in full use, there were almost 8,000 children in the schools across the country; compare that statistic to the year 2002 when there were over 22,500 First Nations children in the child welfare system, showing a progression of almost three times the number living in state care. The numerous social problems resulting from poverty are re-enforced by the Federal Government’s policy decision to neglect taking action despite their own commissions and research data. Procedural problems in child welfare administration arise due to government jurisdictions, which will also be discussed.