This article builds on group position theory and the subcategorization model of intergroup contact by illustrating how, in a small-town settler-colonial context, contact tends to reproduce, rather than challenge, the inequitable racial structure. In Northwestern Ontario, Indigenous-settler relations are characterized by widespread intergroup marriage and friendship as well as pervasive prejudice and discrimination. Using 18 months of fieldwork and 160 interviews and surveys with First Nations, Métis, and non-Indigenous residents, I show that although contact is associated with less “old-fashioned” prejudice (i.e., overt categorical hostility), it does not necessarily eliminate whites’ superior sense of group position. Even white individuals who have close Indigenous friends or spouses often express laissez-faire racism. Three mutually reinforcing social processes—subtyping, ideology-based homophily, and political avoidance norms—interact to sustain whites’ sense of group superiority and justifications for racial inequity. These processes are facilitated by historical and structural conditions, in this case colonization and small-town dynamics.
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