My Dog Has Been Peeing Blood And Treatment Isn't Working. Is My Vet Right By Saying He Has Cancer? Or Could It Be Something Else?

Cancer and bladder stones need to be ruled out in this dog.  Most (but not all) bladder stones can be seen via x-rays.  Radiographs (x-ray) are not usually helpful in diagnosing bladder cancer.  Ultrasound is the best method to look at the bladder for stones and cancer.  With ultrasound the lining of the bladder can be examined from all angles and irregularities or tumors can be found. 
There is a test for the most common type of bladder cancer called a Bladder Tumor Analyte test--this is run off urine.  Though depending upon how much blood is present this may not be an option.
Certain cells in the urine can be suggestive of cancer but further testing--ultrasound or Analyte test are needed.
I know it is expensive but you will gain a lot of important information from the ultrasound.

This could be a simple infection but my dog had the same problems and we took him to the vet over and over again for him just to keep prescribing antibiotics. Finally after 3 months off and on I demanded a blood test and found out that he had something to do with anemia because his body was attacking his red blood cells. The vet then tried to cover his but and give him injections and stuff at the end but a few days after our last visit, my dog, "Grady" passed away. It would have been very treatable but the vet didn't take it seriously enough until it was too late. Make sure you get a blood test done right away. Better safe then sorry, and trust me its worth it. That was the worst and sadest experience I have ever had with a dog. Good Luck! I really hope everything works out. Don't want to scare you but I wish someone would have told me before it was too late.

Is your vet has taken the help pathology or just given his opinion like that only.
is you dog has any lump or having tumors or there is shortness of breath your dog needs to be properly diagnosed with blood tests ,fine needle aspirates,or biopsy and Xrays you should have a opinion of other veterinary dog the symptoms you are telling can be of minor infections also.   

I'm not a vet so,I couldn't say but I do know how easy it is to fall in love and hard to take a diagnosis.

If there is any question, take him to another vet for confirmation.