This project is focused on the issue of Indigenous youth incarceration in Canada. The primary goal of this study is to explore whether this prevalent problem is a product of social environment, such as poverty and reserve conditions, or if it is rooted in institutionalized racism in Canada. This study has centrally been a literature review of relevant statistical information and academic publications on this topic, as well as qualitative coding of selected sources. I have also utilized the case study of the Flying Dust First Nation in Saskatchewan in order to explore a microanalysis of an Indigenous community that contradicts prevailing negative social patterns in Canada. My central argument is that high rates of Indigenous youth incarceration in Canada are a product of the combined effect of complex social factors, as well as systemic racism in governmental structures. Through my qualitative research, I have found that some of the academic literature has further propagated stereotypical notions of Indigenous Canadians, as well as produced a distinct binary between Indigenous groups and the non-Indigenous, unmarked category of identity.