The gov at the time thought their culture was crappy because natives were very poor and uneducated etc. They thought that educating them via assimilation and turning them into "normal Canadians" would help them. They were very, very wrong.
O'Toole didn't really say anything wrong.
O’Toole said they were set up to educate them. This is untrue. Wrong. Bull-shite. That wasn’t why they were created.