That's not really accurate.
Canada recognizes situations when mentally ill people are not responsible for their actions and can order permanent or temporary confinement based on whether the person is a danger to society - but that's not every situation.
Not all mentally ill people are deemed "ncr". Mental illness, in itself, doesn't excuse criminal activity. Mentally ill people can be sentenced to prison, so long as they have access to treatment while in prison. Their illness may or may not mitigate their sentence.
With Schizophrenia (a biological disease that manifests itself as mental impairment) - NCR is only relevant when a person commits a crime during a break with reality and because of that break with reality.
Even then, they can be deemed dangerous to society and sentenced to a medical facility - indefinitely.
The Canadian justice system is not permitted to knowingly release a dangerous person back into society - ever.
http://www.statcan.gc.ca/pub/85-561-m/2009016/section-a-eng.htm
"Courts and Review Boards
Available Canadian studies on the criminal courts tend to focus on fitness hearings and cases involving individuals not criminally responsible on account of mental disorder, rather than the number of individuals with symptoms of mental illness who have appeared in criminal courts. As indicated earlier, not all individuals with mental illness would be found unfit to stand trial or not criminally responsible on account of mental disorder." (source link above)