The term "First Nations" refers to the building of the present-day country of Canada. When the French and English came to settle in Canada, they were trading partners and allies in defence with the many aboriginal bands in modern-day Quebec, Ontario and Atlantic Canada. The aboriginals knew the land, how to hunt and trap the animals, how to travel over the river systems, which plants were edible and which were medicinal. Many French settlers married aboriginal women. The original settlers, knowing their vulnerability in the unfamiliar territory, work with, rather than against, the aboriginal people.
Yes, there was some of the latent racism in the Europeans, but it wasn't until after the French and English had firmly settled in Canada that they began the policy of assimilation and racism against the aboriginal people. Hundreds of years later, the government of Canada began using the term "First Nations" to recognize that the aboriginal people of Canada were one of the three founding nations of Canada: Aboriginal, English and French.