Caneater is a slur used to describe Australians in a derogatory way. Differing origins. 1.) A reference to the amount of canned beer they consume, or 2.) A reference to rural Australians who hail from the area where sugar cane is grown. #2 would require it be spelled cane-eater, if you prefer.
The word Caneater is a racial slur that has been used historically to degrade and dehumanize australians. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to australians. If you are unsure about whether or not it is appropriate to use the word Caneater, it is best to err on the side of caution and avoid using it in any situation.