The development of mental health services for people with severe mental illness has in many ways paralleled that in other countries, particularly the United States. As reliance on inpatient psychiatric care has been sharply reduced, a wide range of community supports have been developed. Several distinct institutional and legal features have contributed to shaping the nature of these community supports, which are described herein. At present, the result is a highly fragmented system of care. Key evidence-based practices, notably assertive community treatment, supported employment, and integrated treatment for concurrent severe mental illness and substance use disorder, achieve considerable integration at the clinical level, but remain relatively unavailable in most provinces. The policy of regionalization of services risks inhibiting the development of such practices, which require more centralized technical assistance and monitoring. An evolutionary approach of gradually introducing integrated, evidence-based programs may provide the most feasible strategy for improving the system.