His parents are divorced (since he was 7)His dad had an affair with his new wife - He met his father's mistress (at age 11) - His step-mother hates him and will not say a word to him - His step-mother hates his family and shows nothing but disrespect to them all - His step-mother is isolating his dad from him and the rest of the family 
Has he talked to his dad about this? What sort of relationship does he have with his Dad? If it's a close relationship then can he not ask his Dad to take him somewhere - just for a pizza or something - alone and talk to him about this? That would be my first suggestion. He could say that he is really worried about their relationship, that his Dad means a lot to him and he wants to make sure he stays close and he feels that his step-mom doesn't understand that. He could just say that he wants more quality time with his Dad alone. You don't always have to phrase these things in the negative. If he goes in there and immediately begins to say all the things he doesn't like about his step mom then that's going to put his dad on the defensive. however if he can go in there and state all the positive things he wants from his dad then that's going to look much better and go down a lot easier.
Failing that there is always the classic letter fallback. If you can't talk/i] to someone, then [i]write/i] to them. It's often easier to be less aggressive in a letter because you can think about your words more carefully and even re-write things. Perhaps you could read it over for him, imagine you were his father, and see if you might take any of it the wrong way and then suggest improvements. Maybe he can tell his Dad how much he values the relationship that way - and again it's something that the step-mom needn't know about. Perhaps he could either hand it to his dad personally or send it to his work place.
His mom also remarried to a man - who's not perfect but is not like his step-mother 
I don't mean to sound dense, but is that actually one of his problems? I mean is he cut up about the fact that he now has a step-dad he has to put up with? I can understand that. I mean having a step-parent is not an easy thing. Just because your parent loves someone that doesn't mean that you do, and yet if they are married and living together and contributing to the household bills and stuff then you're in an awkward position because they assume an authority role over you. That's never easy to accept because you have no reason to subordinate yourself to them.
What specific problems is he having there though?
He just found out that his dad may be bi-polar - He just found out that his grandfather, who he is very close to, may have alzheimers disease 
That's a bit of a double whammy. However, there ARE organisations to help with that. I know at least in the UK there are charities and groups that specialise in helping the relatives of people who suffer from illness or disability. There must be plenty in Canada too and you should try and do some research for him and help to get him in touch with those groups. They aren't just there for the sufferers - they are there for the family as well. They could give him advice either on how to deal with the conditions (particularly with his dad) and on where else he could seek help. If nothing else then they would be able to educate him regarding what the conditions mean and what to expect, which is often a great comfort in itself. I strongly urge you to help him talk to or see these people. If you can go with him to see them then that's often better ad the face to face contact is more reassuring.
He is going to university next year to study Political Science and will eventually go to law school - He said he doesn't really want to do that, but that's what his parents want him to do - He really wants to be an entrepreneur, but he believes no one will accept that - He wants to be Prime Minister of Canada one day, but to do this, he feels he has to be somebody he's not 
I imagine that there is more to this than what he wants in life. I don't know him, but sometimes when people set themselves such lofty ideals (and many people do so and then fail to ever come near achieving them) it's often because of something in their lives that they are striving for that they could actually accomplish much more simply. Perhaps what he is actually expressing is that his life doesn't seem to have meaning. Perhaps what he really wants to be noticed by other people, to be respected, admired, to be independent and successful. It may well be those [i]qualities of life that he is yearning for and the ideas of being an entrepreneur or Prime Minister are actually manifestations of those desires. It's something that's worth exploring with him.
If he really wants to go out and try those things though then of course he should do so regardless of his family. Sometimes the only way we find out what our true goals are is to chase the ones we have in the moment and see where they take us. But make sure he is sensible about being an entrepreneur if he goes that route. It's not easy and it's a very risky way to start your life when you have no capital or credit history. Excitement and ambition are great, but they do have to be realistic as well.
He told me he wanted to abandon Christianity and be a Buddhist - He is Italian (I already knew) - And he said he was bi-sexual (he is leaning towards gay, but can't accept that and is disgusted with himself) - He feels that because of these things, he will not be accepted by others and therefore will be a failure 
He has some serious self image problems doesn't he? I know I say it a lot on eHelp, but I seriously suggest he seeks professional help in the form of therapy. He has no need o be disgusted with himself. Sexuality is such a fluid and dynamic thing, and such a varied aspect of human nature when you look at it globally, that there is no way he should feel guilty because of on particular concept applied to him by one particular culture. He is simply human, and people come in all sorts of weird an wonderful varieties. To think that he will never be a success because of his sexuality is silly, but understandable. Obviously again this reflects his lack of self esteem and it's something that therapy might really help with. But surely another thing you can do as his friend si to start looking for role models for him that are openly bisexual or gay and who have achieved great success. GO out to the bookstore and hep him pick up a couple of auto-biographies by such people - show him that there are people out there who are successful regardless of their sexuality. Those books might also serve the double purpose of helping him to learn form their experiences how they dealt with their feelings of uncertainty about their sexuality as well as how they dealt with reactions form others. If you can't afford books then help him go down the library and look for some. Check out AMazon first and see if you can actually get some titles you can look up - or use the internet in school if you library catalogue is online. Show him he's not alone and his goals are far from unachievable.
He keeps all of it inside him (for 4 years now) and then last night he cracked - I am so scared for him, he is talking about being seriously depressed and truly thinking that he may be bi-polar for real - He says he thinks about suicide alot, but is afraid of death - He even knows how he wants to die... - It's really freaking me out and I don't even know that half of it he says - This is all I know so far and I'm already scared 
Okay, we can't offer you advice regarding suicide except to say that you need to speak to one of the helplines we have listed in our resources section or to urge him to seek professional help for those feelings.
Regarding his depression there is not necessarily any reason to think he is bipolar. He may simply be very depressed. Lots of people go through intense stages of depression in their lives without having any serious condition like bipolar disorder. That's not to belittle his condition or his feelings - just that it isn't necessarily anything that supportive friends and good help can't sort out. Clearly he is extremely unhappy and feels hopeless, which is why the best thing you can do is urge him to seek that help and support him in the mean time by reminding him that there are people like you who care about him and want to see him make something of his life.
I keep telling him that he has to be himself! - That others will love and accept him for who he is - I say all these encouraging things like this - telling him that he can't hide behind someone he's not forever, because it won't work - it'll seriously hurt him in the long run!! - He disagrees completely with me and feels that the only way to succeed is to be someone else...someone very different... the "societal norm" 
That will never work. Been there, tried that (as you know). Hiding is not a good solution. you know my current situation, and you know I got there because I chose to hide form my problems - in my case I didn't hide behind an alter ego, I hid behind my wife, but the principle is the same. Hiding will work for a time. WOrse still - if he leaves and goes to uni then he may feel that to some extent the novelty provides him with a brand new cover to hide behind. People won't know him and he can pretend to someone completely different. He may even feel like he has successfully run away. In the end though he will find these feelings popping up and biting him square in the arse. Burying them will only work for so long before he gets screwed over by his own feelings of lack of self worth and his own lack of self respect. Every time he tried to be someone else he re-affirms the internal message that he is no good, and that he needs to meet other people's expectations to be worth anything. Think about it - he is saying to himself that unless he acts in a way that others expect he is not deserving of any happiness, respect or success. So every time that he gets rejected, put down or fails at something he is going to suffer a massive blow to his ego. Normally people take those blows because they have an inner core that they can refer to that lets them know they have strength and can get through. If he is relying on others for his sense of identity and worth then such situations will actually attack and erode his very self image. You have to help him to find his own self worth - to show him his own inner qualities and you as his friend have to reinforce those qualities and help him to express them. Encourage him to display the, reward him when he does, and try to bring him out of himself so that he can see just how worthwhile those qualities are.