I've seen it done both ways, but I would urge you to find a way to carry it on the inside. A full bear canister is heavy and the smooth plastic is slippery. Unless really really well secured, the can can become something with a sort of mind of its own, shifting around and making you wonder if it's not going to slide out and fall down into a ravine.

What I've found works is to just strap more stuff on the outside to give more room for the canister. My pack has external mesh, which helps a lot in this, but in general, lots of other gear will work better if strapped externally than a bear can.

I'm NOT saying that an external carry for a canister won't work. If you do go that way, however, I recommend that you do one or more day hike somewhere with your pack just as you anticipate it and see how it works for you, not just walking a few paces with it in your house.