Introduction: Individuals with severe and persistent mental illness (SPMI) present distinct challenges in mental healthcare due to the chronic and complex nature of their conditions. This study was conducted to assess the clinical efficacy and potential cost-effectiveness of a multidisciplinary community-based psychosocial rehabilitation team serving individuals with SPMI in Nova Scotia, Canada. Method: This study was conducted to evaluate the effects of a community-based psychosocial rehabilitation program on individuals with severe and persistent mental illness (SPMI) in Nova Scotia, Canada. This research focused on clinical outcomes and potential cost savings following a one-year intervention, offering critical insights into the benefits of community-based care for this population. A cohort of 137 clients accepted into the community rehabilitation service (Connections Dartmouth) between September 2016 and September 2020 was analyzed. Each participant received one year of community rehabilitation intervention. Using data from the Canadian Medical Service Insurance (MSI) billing system, this research compared the use of inpatient services and Emergency Department visits in the year prior to and the year following the intervention. The findings provide valuable evidence on the role of community rehabilitation in reducing healthcare utilization for individuals with SPMI. Results: The 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% vs. 60%) or Emergency Department visits (82% vs. 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. Conclusions: This uncontrolled study suggests that community rehabilitation is associated with positive clinical outcomes for individuals with SPMI in terms of reduced inpatient service use and associated costs. Further research, including controlled studies and cost-effectiveness studies, into the community psychosocial rehabilitation services in the Canadian setting is needed.