The province doesn't have the capacity to treat all the young people who have mental illnesses, so patients can wait up to two years for care in some cases, said deputy PC leader Christine Elliott.
"Imagine telling a parent of a suicidal 10-year-old that they're going to have to wait two years for treatment," Elliott said at the Youthdale Treatment Centre.
"It's really unconscionable, and we need to do better for those individuals and families."
The Ministry of Health pays up to $80,000 to send a mentally ill youth out of the country to get the care they need, said Elliott.
"What we're doing right now here in Ontario is we're spending millions and millions of dollars sending children and youth out of country — primarily the United States — for treatment," she said.
"We believe that we could provide those services closer to home, and at a far lesser cost."
Part of the problem, said Elliott, is there's no coherent system for mental illnesses, with services in Ontario scattered over 10 ministries, 440 children's mental health agencies, 330 community agencies and 150 addiction treatment centres.
"We need to co-ordinate those services. We need to build capacity," she said.
"In that way we’ll make sure that children and youth receive the treatment that they need, and that we reduce the stigma that hinders so many from finding treatment."
Health Minister Deb Matthews said the government has been creating more capacity for residential treatment for mental illnesses, and reduced the number of patients being sent to the U.S. from 100 in 2007-08 to 78 in 2011-12, cutting costs of the out-of-country care program from $10 million to $5 million.
"Everything Tim Hudak is advocating we are already doing, such as getting various organizations working better together," said Matthews.
"We’re spending half what we used to on out of country care because we’ve built capacity here."
The government is also spending an additional $6.8 million this year to help treat about 300 more children and teens with eating disorders, and recently opened a new treatment facility in London, added Matthews.
"It’s starting to care for people here rather than send them to Arizona or Boston or some of the other centres, and it’s less expensive," she said.
The Tories want the Ministry of Children's Services merged into the Ministry of Health, complaining "kids fall through the cracks" under the current system.
It's time mental health was brought out of the shadows and treated with the same importance as physical health, said Opposition Leader Tim Hudak.
"We need to make sure mental health assessments are part of our system," he said.
"When a frail senior is treated for complex continuing care, you need at the same time to have a mental health diagnosis, for example tests for dementia, depression."
Hudak plans to release a white paper Thursday on mental health calling for "reinventing a part of our health-care system that's in urgent need of change."
It will be the latest in a series of white papers from the Conservatives on everything from welfare and education to pensions and labour markets, as they float ideas that may or may not become party policy for the next election campaign.