i've never heard of time off being frowned upon in american or canadian institutions (including ivy league ones). i know more about PhD applications than Masters applications, but i would assume that they would be similar. in the US the following three are important:

- grades
- graduate record exam score
- letters of reccomendation

they are said to be evenly weighted, but i'm not at all convinced that they are (institution comes into play as does the reputation of the referees).

i made a typo in my above post. if you can get a good GRE score then i would make sure that you send it off with your applications even if they don't require it they won't be able to help taking a peek and if you score well then it can't hurt to include it.

they won't hold it against you that you took time off... but... personally... (i know everybody is different)... but personally, i wouldn't tell them that you had mental health problems. you could say that you weren't sure what you wanted to do with your life... then once you made your decision you returned and then emphasise your grades since then. they are likely to understand that smart people have a tendency to not apply themselves if they don't feel terribly motivated and they shouldn't be concerned about a period of figuring things out if you have demonstrated that you can apply yourself since.

(i say this because there is still a lot of stigma in the united states about mental health issues. IMHO it is none of their business and telling them is telling them more than they need to know. there has been talk about compiling a mental health database of individuals who have a history of mental illness and given the current situation of biological / genetic determinism i'd personally be very cautious indeed about their thinking you might have some brain damage that might result in mass shootings etc. maybe i'm overly concerned... but the fact is that it is none of their business).

what they really care about at the end of the day is the quality of the work that you do while you are affiliated with them.