After years of intensive study, sleepless nights, and clinical rotations, you’ve finally reached the light at the end of the tunnel: you’re completing residency and stepping into independent practice. This milestone is not only professionally fulfilling but also financially and legally complex.

For Canadian physicians, the transition from residency to full practice requires careful planning to ensure a smooth start, one that protects your finances, your practice, and your future. Here’s a comprehensive checklist to help you navigate this pivotal phase.

1. Choose Your Practice Type and Location

Before anything else, decide how and where you want to practice:

A. Solo, Group, Locum, or Hospital-Based

• Solo Practice: Full control, but full responsibility (administrative, financial, legal).
• Group Practice: Shared overhead and peer support.
• Locum Tenens: Flexibility and varied experiences, ideal for early-career exploration.
• Hospital-Based: Stability, with less business overhead.

B. Geographic Considerations

• Consider lifestyle, family needs, cost of living, and patient demographics.
• Look into provincial licensing requirements and incentives for underserved areas.

✅ Checklist:

• Chosen practice model
• Selected geographic location
• Registered with provincial College of Physicians and Surgeons

2. Review and Secure Licensure

Even if you’re licensed in one province, moving to another may require additional steps. Each province has its own college and standards.

• Apply for an independent practice license if you’re still under a postgraduate or restricted license.
• Ensure your MD, LMCC, and specialty certification (e.g., from the RCPSC or CFPC) are up to date.

✅ Checklist:

• Independent license obtained
• College registration completed (CPSO, CPSA, etc.)
• CMPA membership updated

3. Understand Your Employment or Contract Terms

Before signing any contract, seek legal counsel. Physician employment and contractor agreements often include complex clauses that can impact your income, mobility, and autonomy.

Key Contract Elements:

• Compensation Model: Fee-for-service, salary, blended, or capitation.
• Overhead Costs: What portion are you responsible for?
• Termination Clauses: Notice period, penalties, or non-compete clauses.
• Billing Responsibilities: Will you bill OHIP or another provincial plan, or will the clinic do it?

✅ Checklist:

• Contract reviewed by a legal professional
• Understood billing structure
• Clarified expectations around hours, patients, and overhead

4. Incorporate Your Practice

Incorporation offers potential tax deferrals and income-splitting opportunities, especially once your income surpasses your personal spending needs.

Benefits of Incorporation:

• Tax Efficiency: Corporate tax rates are generally lower than personal.
• Income Splitting: Though rules have tightened (e.g., TOSI rules), some opportunities remain.
• Retained Earnings: Leave money in the corporation for reinvestment or later distribution.
• Lifetime Capital Gains Exemption: Possible if you eventually sell shares of your practice.

Timing:
Some physicians incorporate as soon as they begin practicing independently, while others wait until income stabilizes.

✅ Checklist:

• Spoke with accountant about incorporating
• Registered a Medical Professional Corporation (MPC)
• Applied for a business number and CRA corporate account

5. Set Up Your Billing and Banking Systems

You’ll need to handle the administrative side of your practice, whether you do it yourself or delegate.

Billing:

• Register with the provincial health insurance plan (e.g., OHIP, MSP, AHCIP).
• Choose whether to do billing yourself or use a third-party billing service.
• Understand billing codes, fee schedules, and rules for each type of service.

Banking:

• Open separate business accounts for your MPC (if incorporated).
• Set up GST/HST accounts, if applicable (e.g., for cosmetic or uninsured services).
• Automate savings and expense tracking.

✅ Checklist:

• Registered for provincial billing number
• Chose billing software or service
• Opened business bank and credit accounts

6. Obtain Appropriate Insurance

Professional and personal insurance needs change significantly once you start practicing.

Must-Have Coverage:

• CMPA Membership: Updated for independent status and correct scope.
• Disability Insurance: Crucial to protect your future income; ideally own-occupation, indexed.
• Life Insurance: Term policies are cost-effective; consider for family or debt protection.
• Office Insurance: For leased or owned premises.
• Errors & Omissions: Some institutions require additional coverage beyond CMPA.

Optional (But Wise):

• Critical Illness Insurance: Lump sum payout upon diagnosis of serious illness.
• Health Spending Account (HSA): Tax-efficient health benefit for incorporated physicians.

✅ Checklist:

• Reviewed insurance needs with advisor
• Updated CMPA details
• Secured disability and life insurance

7. Build a Professional Advisory Team

You’re now running a small business, and no business succeeds without professional help.

Key Advisors:

• Medical Accountant: Understands physician income, taxes, and incorporation.
• Lawyer: Specializes in healthcare contracts, incorporation, and practice acquisition.
• Financial Advisor/Planner: Creates long-term plans for saving, investing, and retiring.
• Bookkeeper: Keeps your financials clean, allowing smoother year-end reporting.

✅ Checklist:

• Hired or consulted a medical accountant
• Secured legal advice for contracts/incorporation
• Connected with a financial advisor/planner

8. Create a Personal Financial Plan

You’re likely to see a significant increase in income. It’s easy to fall into lifestyle inflation, but smart financial planning starts now.

Key Areas to Address:

• Emergency Fund: Aim for 3–6 months of expenses (even if you’re incorporated).
• Student Loans: Review repayment options (federal, provincial, private).
• Debt Repayment vs. Investing: Balance high-interest debt and long-term investment.
• RRSP vs. TFSA vs. Corporate Investments: Decide how to optimize your savings.
• Budgeting Tools: Use software like Mint, YNAB, or spreadsheets.

✅ Checklist:

• Created a monthly budget
• Reviewed student loan repayment strategy
• Opened and funded TFSA and/or RRSP

9. Understand Tax Obligations

Transitioning to independent practice introduces new tax responsibilities.

Key Concepts:

• Quarterly Tax Installments: CRA requires prepayment based on projected income.
• HST/GST Requirements: Certain services (like cosmetic dermatology) require collection.
• Deductible Expenses: Medical equipment, office rent, CME, scrubs, etc.
• Salary or Dividends?: Your accountant will help determine the best mix.

✅ Checklist:

• Registered for HST/GST (if applicable)
• Set up CRA My Business Account
• Began quarterly tax installments

10. Prepare for Long-Term Wealth Building

It’s never too early to plan for your future.

Strategies to Consider:

• RRSP Contributions: Reduce taxable income and grow retirement savings.
• TFSA Contributions: Grow wealth tax-free, useful for medium- or long-term goals.
• Investment Portfolio: Consider low-cost ETFs, managed portfolios, or discretionary managers.
• RESP: If you have kids, take advantage of government matching.

✅ Checklist:

• Opened TFSA, RRSP, RESP (if needed)
• Defined short- and long-term financial goals
• Chose investment strategy

11. Establish a Digital and Professional Identity

Patients and employers alike will Google you. Make sure what they find represents you well.

Essentials:

• Professional Website: Showcase your services, experience, and philosophy.
• LinkedIn and Directory Listings: Keep them up to date.
• Email and Practice Branding: Create a professional email and logo, if applicable.
• Online Reviews: Monitor RateMDs, Google, and HealthGrades.

✅ Checklist:

• Created or updated professional website
• Set up business email and domain
• Monitored online profiles and reviews

12. Plan for Time Off and Wellness

Your income might depend on your availability, but don’t forget to plan for breaks.

• Establish a vacation schedule and stick to it.
• Set up coverage for time off (especially in solo practice).
• Consider joining or creating a peer support group.
• Invest in mental health and self-care tools.

✅ Checklist:

• Scheduled time off in first year
• Created plan for coverage during absences
• Prioritized mental and physical health

Final Thoughts

The transition from residency to practice is more than just a change of title, it’s a complex financial and legal transformation that can set the tone for your entire career. By checking off each item on this list, you’ll not only protect yourself legally and financially, but also gain the confidence to thrive as a practicing physician in Canada.

The key takeaway? Don’t go it alone. Heritage MD is here to help with sound advice, professional services, and expert guidance.  Therefore, surround yourself with advisors, learn continuously, and think of your medical practice as both a service and a business.

Quick Reference Summary Checklist:

✅ Legal and Licensing:

• Independent license secured
• Provincial College registration complete
• CMPA updated

✅ Contracts and Practice:

• Reviewed employment/contract terms
• Chose practice model and location

✅ Business Setup:

• Incorporated (if applicable)
• Business banking set up
• Billing registered and functioning

✅ Insurance:

• Disability, life, and CMPA in place
• Optional critical illness and office insurance

✅ Financial Planning:

• Budget and emergency fund in place
• Loans and taxes planned
• TFSA/RRSP/RESP contributions begun

✅ Advisory Team:

• Medical accountant
• Healthcare lawyer
• Financial planner

Need help navigating your transition? Heritage MD specializes in guiding Canadian physicians through the legal, financial, and professional complexities of modern medical practice. Contact us to schedule your personalized consultation.