This paper explores differential racialization, diaspora, and historical trauma in Canada in Joy Kogawa`s Obasan. Canadian multiculturalism has been an integral part of the national identity, and the Canadian government has suggested that this multiculturalism is the heritage of tolerance in Canadian history. However, Joy Kogawa, as an ethnic minority writer, rebuts the contention by rewriting the Japanese-Canadian community`s history, which had been silenced and erased in official Canadian history. Obasan presents how white-oriented society has enforced differential racialization and institutional racism. Since Japanese people first immigrated, white Canadians considered them as a `lower order of people.` However, they were also afraid of `Yellow Peril.` Their ambivalent emotion towards Japanese-Canadians took the form of evacuation. Obasan focuses on the evacuation, internment, and diaspora of Japanese-Canadians during World War II. To heal the historical and community trauma, Kogawa presents Naomi, whose hybridity allows her to understand both Canadian and Japanese culture. Obasan insists ethnic minorities have to remember and face history to overcome and heal the disasters in the past.