Many health policy reformers and researchers in the United States have focused on the Canadian health care system and its lessons for design of a national health care program in the U.S. Yet minimal attention has been given to Canadian mental health policy in this discussion. The author reviews the historical development of mental health services in Canada and discusses five current sources of tension in Canada's mental health care system, many of which are familiar to the American setting: restriction on fee-for-service payments, a two-tiered pattern of care involving provincial mental hospitals and general hospital psychiatric units, shortages of mental health care resources, limited funding of community-based programs, and lack of coordination of care. The author concludes that universal insurance coverage patterned after the Canadian model would ameliorate only some problems faced by mentally ill persons in the United States. Mental health benefits must be structured to ensure the availability and organization of a full spectrum of long-term health care and supportive services.