Introduction: People with severe and persistent mental illness (SPMI) present unique challenges in mental healthcare due to the enduring nature and complexity of their conditions. This study evaluated the clinical effectiveness and potential cost benefits of a multidisciplinary community psychosocial rehabilitation team catering to individuals with SPMI in Nova Scotia, Canada. Method: The Canadian billing system of Medical Service Insurance (MSI) was used to compare inpatient service use and emergency department visits during the year before and the year after receipt of one year of community rehabilitation for patients referred to the team from September 2016 to September 2017. Result: Results demonstrated a statistically significant reduction in mean admission rates and length of inpatient admissions in the year following rehabilitation compared to the pre-rehabilitation year. A substantial percentage of patients experienced no inpatient admissions (88% v. 60%) or ED visits (82% v. 67%) in the post-rehabilitation year compared to the pre-rehabilitation year. There was a significant reduction in inpatient days by 90%, translating into substantial cost savings. The findings highlight the potential economic benefits of community rehabilitation for people with SPMI. Conclusion: This uncontrolled study suggests that community rehabilitation is associated with favourable clinical outcomes for individuals with SPMI in terms of reduced inpatient service use and related costs. Further research into community psychosocial rehabilitation services in the Canadian setting is needed, including controlled and cost-effectiveness studies.