This article examines the failure of Canadian public policy in addressing racial economic inequality directly. Our analysis contends that Canada's key policy regimes were established in the postwar era, when approximately 96 per cent of Canadians were of European descent. As a result, the frameworks, problem definitions and policy tools inherited from that era were never intended to mitigate racial economic inequality. Moreover, this policy inheritance was deeply shaped by liberal universalism, which rejected racial distinctions in law and policy. These norms were carried forward into the more racially diverse Canada of today, where they have steered attention away from the use of racial categories in policy design. As a result, racial inequality was not a central priority during major policy reforms to core policy regimes in recent decades. In theoretical terms, our analysis contributes to Canadian Political Development through a sustained consideration of the intersecting roles of ideational frameworks, path dependency and policy inertia.