Canada has confirmed its standing as one of the most diverse nations in the world -- a kaleidoscope, according to the national census, of cultures, languages and nationalities that amount to more than 200 different ethnic groups and a foreign-born population second only to Australia's.

The tale is told in the way the country's citizens name themselves individually: for the most part and in growing numbers, as Canadians first, but with as many as six different nationalities in some cases counted in their ancestry -- the result of increasing immigration and intermarriage in an ever-changing national mosaic.

"We have the potential to build a very unique society," said John Anderson, a senior economist for the Canadian Council on Social Development.

But the country is facing a major challenge, the experts warn, on how well it can keep racial harmony and broaden opportunity in a land where the largest cities, especially Toronto and Vancouver, now report among the most culturally varied populaces on earth.

"Canadians hope they have a knack for solving intergroup relations," observed Jeffrey Reitz, a sociology professor at the University of Toronto who studies immigration. "Whether that's a reality is going to be tested."

For Canada in the 21st century, looks nothing like it did 100 years ago. The census data show that the visible-minority population is growing far faster than the total population; under current trends, by 2016, visible minorities will account for one-fifth of Canada's citizens.

Residents born outside the country now number 5.4 million people -- 18.4 per cent of the population, the highest count of foreign-born citizens in 70 years, according to the 2001 census. Only Australia had a higher number at 22 per cent; the United States, by comparison, had only 11 per cent in 2000.

But those seven decades have brought a dramatic shift in the racial makeup of Canada's new arrivals. Immigrants from Asia, including the Middle East, account for more than half of the 1.8 million people who arrived in the past decade. Among them, the leading birth country was China. European immigrants, who led the wave of newcomers in the first 60 years of the century, are a distant second at 20 per cent.

Where the new arrivals live has added to a growing split between urban and small-town Canada, between the baby-boom diversity of the major cities and the shrinking homogeneity of the country.

Though 94 per cent of immigrants make their homes in metropolitan areas, it is mainly the largest three centres to which they are drawn: together, Toronto, Vancouver and Montreal received almost three-quarters of those arriving in Canada in the past decade.

"In many ways, Canada is still a very white place," said John Torpey, sociology professor at the University of British Columbia. "Depending on where you live you have a very different image of the country."

But Dr. Reitz said it is only natural that immigrants will settle in urban pockets, and he pointed out that public attitudes toward immigration do not differ significantly between rural and urban Canadians. He argues that the real challenge will be dealing with the race issues that result from the diversity -- especially in the area of employment and wages, and when children of the most recent immigrants reach adulthood.

"They will be much more committed to the country," he said, "and much more demanding of equal opportunity."

The census, meanwhile, suggests that an increasing number of Canadians now stamp themselves with their country's name when asked to list their ancestry. In 2001, 39 per cent of the population reported Canadian as an ethnic origin, either alone or with other origins -- up from 31 per cent in 1996. The number was, however, far greater for people with both parents born in Canada, who claimed French or English as their mother tongue. Only 4 per cent of people with both parents born outside the country put Canadian on the list.