Canada's First Nations are in a "perpetual state of crisis" and conditions will not improve if they splinter into factions, National Chief Shawn Atleo said on Tuesday.

Atleo was speaking in Whitehorse, where more than 200 chiefs have gathered for Assembly of First Nations' annual general meeting.

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AFN National Chief Shawn Atleo is defending the AFN's relevance, as a splinter group attempts to form in the Prairies. (CBC)

While the AFN meeting got underway, several chiefs from Saskatchewan, Alberta and Manitoba were at the National Treaty Gathering which began Sunday at Onion Lake, Sask.

One possible outcome of the Onion Lake gathering could be a new breakaway group, formed out of dissatisfaction with the way the AFN has been working with Ottawa.

Grand Chief Derek Nepinak, from the Assembly of Manitoba Chiefs told CBC News at the end of June that he would make a pitch in favour of a new group called the National Treaty Alliance because there's been too much rhetoric and not enough action on First Nations issues.

On Tuesday in Whitehorse, Atleo called for unity among First Nations and told delegates the AFN strives to respect the sovereignty of First Nations while "being careful not to overstep" its boundaries.

"Our agenda, the First Nations agenda, requires that everyone come together … just as Treaty 7 pulled First Nations together to deal with the rising water," he said, referring to the recent floods in Alberta.

A call for unity should not be confused with a call for assimilation or cultural hegemony, said Atleo, adding that the AFN supports individual nations negotiating treaty issues with the federal government.

"It does not mean that we must march in lockstep or abandon our diversity," he said. "It means we must listen and understand one another. It means driving towards our common values and shared interests and priorities.

"That is how we drive change. That is how we smash the status quo."

Atleo spoke of a "resurgence of both family and nationhood" among First Nations in Canada and pointed to self-governments in Yukon as a positive model.

"They have already moved beyond the Indian Act; they are setting their own futures," he said.

The assembly continues until July 18.