By the turn of the century, western Canada had the robust beginnings of a residential school system that was designed with Euro-Canadian racial assumptions and evangelical objectives, rather than Native needs and negotiated commitments, in mind. It was the unhappy experience of the 'manual labour school' at Mount Elgin in Ontario all over again, but now on a larger and more damaging scale.

      Considering that modern-day residential schooling was born in such a dubious manner, it is hardly surprising that the experiment proved disappointing. Superficially, the new style of Euro-Canadian instruction for Native peoples at the hands of the Christian denominations seemed to expand steadily until the Great Depression. As the assimilative purpose and oppressive atmosphere of the industrial and boarding schools became apparent, many parents turned against the schools that in some cases they had sought.

      More serious, however, was the perception that took hold by the 1890s that the costly industrial schools simply were not succeeding. In particular, reviews that were conducted during the Sifton era revealed that industrial schools were not producing many young adults with skills for the labour market, and the few that emerged so equipped found it difficult to get and keep jobs because of racial prejudice. During the twentieth century, a succession of inquiries by both government and church agencies simply confirmed the gloomy conclusions that bureaucrats had recorded as early as 1898.

       Because Native affairs occupied a low priority with Canadian voters, none of whom were status Indians until 1961, there was no political incentive to spend money to improve residential schools or to protect the Indian Affairs budget in adverse financial times. Schools experienced cuts during the Great War, through part of the Great Depression, and again in the Second World War. During times of inflation and labour shortage, such as wartime and the post-war boom of the 1950s, Ottawa was slow in responding to the fiscal problems of the schools with greater financial aid. When demand and need rose, Ottawa tried to avoid meeting the increased requirements. The long decline in the population of status Indians halted sometime early in the 1930s and was succeeded by population growth. The rise became steeper during the Second World War and in the, 1950s, alerting government to the looming financial obligations of continuing residential schools, even for a minority of Inuit and status Indian children. The consequence of these financial portents and other factors such as changing ideological fashions was a movement towards, first, an integrated education policy and, finally, the attempt to phase out residential schools entirely. Closure in 1969 was the logical culmination of disillusionment in government.