Mandela has been in the hospital since June 8 and recent court documents filed by his family stated he was on life support and near death.
Mandela's daughter, Zindzi Mandela, said on Wednesday that her father is gaining "energy and strength" and may be going home "any time soon," words that gave an uplifting tone to an event held in Toronto.
Hundreds gathered to mark the celebration at the Nelson Mandela Park Public School, where children and Juno Award-winning musicians performed side by side.
"Today is more special than even the previous years because of the situation in which Nelson Mandela finds himself, you know that as we speak he is lying in hospital," said Membathisi Mdladlana, South Africa's High Commissioner to Canada, who added that he hoped Mandela was celebrating in his hospital bed.
"Who would have thought at this point in time that we would be celebrating 95 years, but at the same time celebrating the life and the legacy of Nelson Mandela?"
Lloyd McKell, vice-chairman of Toronto's Honouring Mandela Committee, said that with Mandela approaching the last phase of his life it was important to put on a commemorative event in his honour.
McKell also said that he had fond memories of Mandela from as far back as 1990 when he addressed 1,500 students at Toronto's Central Technical School after his release from prison.
"The auditorium was electrified with his presence, the students stood there in rapture at his every word, this man who they had heard about who seemed like a mythical person but was real when he was standing among them in this auditorium," he said.
"What he was able to communicate to those young people as he spoke directly to them was a sense of bonding emotionally with them, relating to them as young people and calling upon them to do whatever they can in their lives to establish a spirit of democracy, of caring, of forgiveness and conciliation."
Lorraine Klaasen, a Juno Award-winning singer from South Africa, said the last time she performed at an event like this was for Mandela himself at the Rogers Centre, then known as the SkyDome, in 1998.
"This is a celebration of his life, his contribution to the people of South Africa and to the world in general," she said
Organizers led the crowd in 67 seconds of applause to mark the 67 years Mandela devoted to pursuing democracy and making the world a better place, before singing happy birthday.
"Well I've always read a lot about Nelson Mandela ... and I grew up here and I'm just happy to see the city is doing something so fair and fun in memory for such a good guy," said 16-year-old Jennifer Rose-Hewitt. "I think hearing that he's going to be okay and staying positive for someone like this makes things much easier."
Twelve-year-old Ankita Mehta said that Mandela was an inspiration to her, from what she has studied about him in school.
"I heard that he was in jail for a really long time and I'm really happy that he fought and didn't give up," she said. "It shows me how I can keep on going with my dreams."
The Toronto Children's Chorus returned from South Africa on Thursday night after a two-week trip that included a day spent at the Pretoria hospital where Mandela is being treated.
The choir, which includes children ages 11 to 16, sang a blessing on Saturday outside the gates of the hospital.
One of the members of the choir, Claire McDonald, 16, said the gates were plastered with messages and well wishes for Mandela.
"It felt really incredible that we will be part of that history," McDonald said, adding that the choir wrote a collective note to add to the pile of well wishes for the Mandela family.
"Even if [people] aren't in South Africa right now, and even if they don't have something to leave for him, I still think he will know if they pray for him," she said. "It's a world event that is going on. He is a great man."
Prime Minister Stephen Harper said in a statement that Mandela is "a model of humility, grace and forgiveness, whose life and teachings are an inspiration for all those who strive for freedom, democracy and reconciliation."
NDP Foreign Affairs Critic Paul Dewar said in a statement that Mandela "is proof that one person can change the world," and that he remains an inspiration despite his poor health.
Liberal Leader Justin Trudeau wished Mandela a happy birthday on Twitter and said that he "continues to be an inspiration to people around the world."
Mandela made three visits to Canada, and during the latest in 2001 he received honorary citizenship.
The United Nations declared July 18 Nelson Mandela International Day and tributes poured in from around the world.
Note to readers: This is a corrected story. An earlier version misspelled the first name of the South African High Commissioner.