This paper presents a comprehensive measure of the incremental economic burden of mental illness in Canada which incorporates the use of medical resources and productivity losses due to long-term and short-term disability, as well as reductions in health-related quality of life (HRQOL), for the diagnosed and undiagnosed population with mental illness. The analysis was based on the population-based Canadian Community Health Survey Cycle 2.1 (2003). For all persons, we measured all health services utilization, longterm and short-term work loss, and health-related quality of life and their dollar valuations, with the economic burden being the difference in dollar measures between the populations with and without mental health problems. In total, the economic burden was $51 billion in 2003. Over one-half was due to reductions in HRQOL. The current accepted practice in economic assessments is to include changes in medical resource use, work loss, and reductions in HRQOL.