OTTAWA - Canada's native population has topped the million mark for the first time in the latest census, with slightly more than half the country's 1.2 million aboriginals living off reserve.

Fifty-four per cent who consider themselves North American Indian, Metis or Inuit live in or near urban areas, according to the 2006 national survey. That's up from 50 per cent in the census taken a decade previous, say figures released Tuesday by Statistics Canada.

But analysts say what appears to be a gradual urbanization of Canada's aboriginal population does not mean reserves are emptying. On the contrary, there has been net migration back to First Nations over the last 40 years.

And while many people enjoy good housing and jobs in cities, some of Canada's roughest streets are disproportionately home to aboriginals. Overwhelmed and under-funded agencies say it's a growing struggle to offer services ranging from job training and affordable rent to a bowl of soup.

"Locally our friendship centre is facing incredible funding pressures,'' says Susan Tatoosh, executive director of the Vancouver Aboriginal Friendship Centre in the city's notorious Downtown Eastside.

"We have over 1,000 people dropping in on a monthly basis. We keep stats.''

"We have a constant turnover of staff, mainly because of burnout and leaving for better wages elsewhere.''

Winnipeg leads the way with the largest native population of 68,380 or 10 per cent of its total. Edmonton is second with 52,100 or five per cent of its total, and Vancouver has 40,310 or two per cent.

Other cities with high proportions of native residents were Prince Albert, Sask., where native people account for 34 per cent of the population, along with Saskatoon and Regina with nine per cent each, says Statistics Canada.

Overall, the aboriginal share of Canada's population -- 3.8 per cent -- ranks second in the world to New Zealand. The Maori people account for 15 per cent of New Zealand's total, while indigenous people represent a two-per-cent share in the U.S. and Australia.

An estimated 698,025 people identified themselves as North American Indian in the 2006 census -- a number lower than the 763,555 people counted in the government's official Indian Registry as of Dec. 31, 2006. This is in part because 22 First Nations, including Canada's largest Mohawk communities, shunned the census process.

Those reserves report births and deaths regularly through the federal Indian Registry and are generally suspicious of how census data might be used.

The most recent census finds that the proportion of status Indians living on reserve has held steady at about 45 per cent. The Indian Registry, by contrast, tells a different story.

It says there were 615 bands in Canada as of Dec. 31, 2006 with 763,555 members. Most of that total -- 404,117 -- lived on reserves, while 335,109 lived off reserve and 24,329 were on Crown land. The discrepancy between the registry and the census is explained in part by the First Nations who refused to take part in the national survey.

But the registry is also a more static reflection of birth, marriage and death, says Jane Badets of Statistics Canada. The census is a five-year snapshot of where aboriginal people primarily live, she added.

The Indian Registry along with census data are the prime sources of population data that help determine federal funds for native housing, education and health needs. Those agreements were historically negotiated between First Nations and the Crown.

There's a political twist to any suggestion that an increasing number of First Nations people are living off reserve. The federal Conservatives have increased focus on off-reserve needs, most visibly by aligning themselves politically with the Congress of Aboriginal Peoples. The congress purports to represent off-reserve people across Canada, but its membership is disputed by rival groups like the Assembly of First Nations that are more closely identified with reserves.

The congress was notably the only native political group to openly endorse the Tories in the last federal election. Some critics of Conservative aboriginal policy note efforts to increase individual housing and other rights as piecemeal undermining of collective native rights.

In any case, observers stress that the gradual growth of native urban populations does not mean a mass exodus from reserves. In fact, since the mid-1960s more people have returned to First Nations and there's been a good deal of "churn'' back and forth, says Dan Beavon, director of strategic research for Indian Affairs.

Much of the urban aboriginal growth can be traced to second- and third-generation population increases of existing native enclaves.

But bigger factors include "out-marriage'' of aboriginal people with non-natives, along with a spike in cultural pride, Beavon says. People in cities have shown a greater tendency to cite native ancestry or identity from one census to the next, he explained.

The latest census shows 1.7 million people reported having at least some aboriginal ancestry, up from 1.3 million in 2001 and 1.1 million in 1996.

Higher birth rates also play a role, especially on reserves. And there's the simple fact that more First Nations now fall within city boundaries because of amalgamation, Beavon says.

For example, at least 20 First Nations border the sprawling Vancouver area, he says. "Reserves and cities are not mutually exclusive.''

Aboriginal people flock to cities for the same education and job opportunities as non-natives.

"This is not a uniquely Canadian phenomenon,'' says Fred Caron, assistant deputy minister in the federal office for Metis and non-status Indians.

"It's worldwide. No matter what region you go to, there are more indigenous people living in cities in every region of the world -- and facing a lot of the same issues.''

Decent housing, a job and schooling for their kids are the main hurdles for people making the huge cultural shift from remote reserves, Caron said in an interview.

"Those three things, if they line up right, point to success -- especially education.''

In the meanest parts of Vancouver, Winnipeg and Saskatoon the extent to which native people have fallen through social cracks is painfully obvious.

Yet critics say federal and provincial governments aren't doing nearly enough to help these relatively young and growing urban communities to succeed.

Caron points to the federal Urban Aboriginal Strategy, a $14 million-a-year effort to co-ordinate an array of native training, transition and support services in 12 cities. He says Ottawa has forged partnerships and drawn funding from provincial, local and private interests.

"It's a small strategy. It hasn't got a lot of money attached to it,'' he conceded. But there are success stories, such as the BladeRunners program that trains young native workers for jobs in Vancouver's construction trade.

Peter Dinsdale, executive director of the National Association of Friendship Centres, says there's a growing need for the most basic services in cities.

"We provide, disproportionately, poverty-type programs. Programs for children, young parents and their families, food banks, drug and alcohol counselling.''

Dinsdale says that 117 friendship centres across the country tracked 1.3 million services offered to clients last year -- up from 757,000 in 2002-03.

"It's growing exponentially.''

And no one, he says, wants to take on the responsibility or the cost. "There's this huge jurisdictional war going on between the provinces and the federal government as to who has responsibility for urban aboriginal people. As a result, very little is getting done.''