Michael Kirby, Chairman of the Mental Health Commission, said the stigma was often worse than the mental illness itself and announced a multi-pronged approach to counter the problem.
The Commission would promote interaction with people living with mental illness and challenge discriminatory practices and policies in government and the private sector.
"One of the first targets for our anti-stigma campaign is health-care professionals," Kirby said while addressing 141st annual meeting of the Canadian Medical Association earlier this week.
He exhorted Canada's doctors to "demonstrate a commitment to healing" by tackling head-on the myths and stereotypes about people with mental illness.
"I challenge you to help us change public attitudes, to help reduce stigma and discrimination. You can play an invaluable role in improving the lives of people living with mental illness by becoming a community leader on the stigma issue," he said.
The Canadian Medical Association's eighth annual report too seemed to highlight the stigma problem.
"In some ways, mental illness is the final frontier of socially-acceptable discrimination," the CMA said.
The survey found:
Almost half of Canadians, 46 per cent, think people use the term mental illness as an excuse for bad behaviour.
One in four Canadians are fearful of being around those who suffer from serious mental illness.
Half of Canadians would tell friends or coworkers that they have a family member with a mental illness, compared to 72 per cent for a diagnosis of cancer or 68 per cent for diabetes.
Most Canadians, 61 per cent, would be unlikely to go to a family doctor with a mental illness, and 58 per cent would shy away from hiring a lawyer, child-care worker or financial adviser with the illness.
The findings don't surprise Carmen Wyatt of the Canadian Mental Health Association in Calgary, but she said they do trouble her.
"It's just a big, big job to educate people," Wyatt said. "Most mental disorders can be treated, and most people do well with treatment."
Day said mental health issues cost the economy $51 billion in one year almost one-third of the total spending on health care in Canada.
About 60 per cent of Canadians agree the diagnosis and treatment of mental illness is under-funded, and 72 per cent agree it should be on a par with funding for diseases such as cancer and diabetes.
On Monday, Health Minister Tony Clement confirmed the federal government's $130 million funding commitment for the Mental Health Commission, extending its mandate to 10 years, to 2017.
Dr. Patrick J. White, head of the Canadian Psychiatric Association, welcomed the announcement, but noted mental health research receives $65 million annually 25 per cent of the budget given to cancer research.
Doctors, in particular those who work in mental health, have to take a leadership role if attitudes and treatment are going to change, White said.
An American study found half of psychiatrists would rather treat themselves in secret than have mental illness recorded on their own medical charts, he said.
Donald Milliken, former president of the Canadian Psychiatric Association, said there is a growing body of literature showing the intimate connection between mental and physical health that physicians cannot afford to ignore.
He noted that, on average, schizophrenics have a life expectancy 20 years shorter than a member of the general population; for someone with depression, it is 10 years less.
These huge gaps are not due strictly to higher rates of suicide but to physical conditions such as cardiovascular disease and diabetes.
"There must be a conscious decision that mental illnesses are medically important," Dr. Milliken said.
Austin Mardon, an Edmonton man who suffers from schizophrenia, told the CMA conference that the public - including health professionals - has an unwarranted fear of people with mental illness. In particular, they worry that people with mental illness will be violent when, in reality, "they are far more likely to harm themselves than others."
Mardon regretted there was also an erroneous assumption that people with chronic mental-health conditions cannot have normal social lives and loving relationships.