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In Canada, Indigenous persons are often referred to as “welfare sippers,” “lazy,” “substance-addicted,” “unintelligent,” and “undeserving.” These offensive terms have a common meaning; they allude to a deviation from the capitalist ethos, according to which people must uphold a specific type of entrepreneurism, work ethics, sobriety, assertiveness, worthiness, and intelligence and display a specific type of wealth. Our article explores the historical origins of such discursive formations and identifies and exposes the colonial policies and practices that manufactured indigeneity as deviant and, often, criminal in Canada. Based on the Annual Reports of the Canadian Department of Indian Affairs from 1864 until 1936, we demonstrate that the categorization of Indigenous bodies, cultures, and indigeneity as deviant stems from the colonial goal of developing a capitalist economy in the territory that today is called Canada. This goal entailed, among other actions, the violent transformation of Indigenous people into wage workers, which implied the destruction of Indigenous cultures and ways of living. Our project contributes to a historical understanding of racism against Indigenous people and the overrepresentation of Indigenous people in social problems ranging from homelessness and unemployment to criminality and incarceration.