TORONTO - Aboriginal children live in poverty that is shameful in a country as rich as Canada, and it's costing them their future, says the former national chief of the Assembly of First Nations.

"It's a stain on Canada's international reputation," Phil Fontaine told several hundred people gathered at Ryerson University on Tuesday.

Fontaine joined former Liberal prime minister Paul Martin in a lecture hall where they discussed indigenous governance. Both former leaders agreed education is key to improving life for First Nations communities.

Martin said the federal government underfunds aboriginal elementary and high school education 20 to 40 per cent when compared to provincial funding for non-aboriginal education.

Most students on reserves attend schools that Toronto parents wouldn't send their children to, he said.

"Schools that have no science, that have no labs, teachers who can't deal with special cases, schools in certain cases built on toxic dumps," said Martin.

Aboriginal poverty is "an enormous drag" on Canada's ability to create the kind of society it purports to have, said Fontaine.

High suicide rates and the disproportionate number of aboriginals incarcerated are some of the outcomes of poverty, said Fontaine.

He said 27,000-30,000 aboriginal children are in state care -- three times the number of students in residential schools at the height of the residential school experience in the 1940s.

"This is largely the consequence of poverty," he said.

"It has nothing to do with the lack of parental love or a willingness on the part of family or communities to look after their children," he said.

"They're just too poor."

Sixty First Nations communities have no schools. Roughly the same number have schools in a terrible state of disrepair, he said.

"We are depriving First Nations children of the opportunity to get a decent, quality education," said Fontaine.

According to a report published in 2006 by the advocacy group Campaign 2000, one in four First Nations children live in poverty.

The high school dropout rate for aboriginal students on reserves is 60 per cent, compared to 9.5 per cent for non-aboriginal Canadians, according to the Martin Aboriginal Education Initiative.

Only seven per cent of First Nations people have obtained a university degree, compared to 23 per cent of non-aboriginal Canadians.

The federal government can't afford to underfund aboriginal education in a global economy, Martin told The Canadian Press earlier in an interview.

Canada's 34 million residents are competing with juggernauts like China and India, whose populations top one billion, he noted.

But a spokeswoman for Indian Affairs and Northern Development Minister John Duncan said in an email aboriginal education is a priority.

"Our government is committed to ensuring Aboriginal Peoples have access to the same educational opportunities as other Canadians," said Michele-Jamali Paquette.

The Harper government has reached six agreements with provinces and First Nations since it took office, she said.

"Paul Martin had the chance to help improve the lives of Aboriginal Canadians when he and his Liberal party were in office for 13 years," she said.

Martin said he remains disappointed the Harper government killed the Kelowna Accord his government signed with the provinces, territories and aboriginal leaders in 2005.

Lawyer Darrell Doxtdator of the Six Nations said he wasn't impressed by the speeches.

He was one of a handful in the audience allowed to ask a question before the crowd was hustled out so the next class could take their seats.

The former political adviser to Six Nations elected chief David General said it's time Canadians told their politicians to get moving.

Afterward, he said First Nations people are frustrated after years of unresolved land claims and funding shortfalls.

"Good governance requires good people and good money," he said.

"Unfortunately we have the people but the money we're provided is grossly inadequate and as long as it's given short shrift, problems will continue," he said.