Aboriginal peoples in Canada are gaining influence in post‐secondary education through Aboriginal‐directed programs and policies in non‐Aboriginal institutions. However, these gains have occurred alongside, and in some cases through, neoliberal reforms to higher education. This article explores the political consequences of the neoliberal institutionalization of First Nations empowerment for public sector unions and workers. We examine a case where the indigenization of a community college in British Columbia was embedded in neoliberal reforms that ran counter to the interests of academic instructors. Although many union members supported indigenization, many also possessed a deep ambivalence about the change. Neoliberal indigenization increased work intensity, decreased worker autonomy and promoted an educational philosophy that prioritized labour market needs over liberal arts. This example demonstrates how the integration of Aboriginal aspirations into neoliberal processes of reform works to rationalize public sector restructuring, constricting labour agency and the possibilities for alliances between labour and Aboriginal peoples.