Moving to Canada as a Doctor: Cross-Border Taxes, Healthcare, and Retirement Explained
Thinking of Moving to Canada as a Physician? Here’s What You Need to Know About Taxes, Healthcare, and Financial Planning
If you’re a physician—or any healthcare provider—considering a move from the United States to Canada, you’re not alone. Over the past years, I’ve received countless emails and messages from doctors, nurses, and other medical professionals weighing the pros and cons of a one-way ticket north. The queries range from “Is it worth it?” to “How do I even begin navigating the tax systems?” and everything in between.
I get it. The thought of uprooting your career and life to settle in another country is daunting, especially when that country’s tax rates seem higher, the healthcare system is different, and financial regulations feel like a labyrinth. That’s why, in a recent episode of the Interesting MD Podcast, I sat down with Sonya Dolguina: a Toronto-based CPA, cross-border tax expert, and wealth management advisor who literally wrote the book on financial planning for physicians moving from the U.S. to Canada.
In this post, I’ll break down the most critical insights from our conversation. Whether you’re still dreaming about poutine or already scouting for a home in Vancouver, here’s everything you need to know to plan your move like a pro.
1. Taxes: Not as Scary as They Seem—If You Plan Ahead
One of the biggest myths I hear is that Canadians pay “ridiculously high” taxes, especially compared to the U.S. Sure, marginal tax rates are higher in Canada—but guess what? Once you dig deeper, the actual impact is more nuanced. Sonya Dolguina explained that while marginal rates (the highest tax bracket) are steeper, your effective tax rate could only be about 10% higher, especially for employed physicians like me who don’t have extensive write-offs in the U.S.
And, as Sonya Dolguina emphasized, it’s not just about income taxes. Social Security taxes are actually lower in Canada; plus, hidden costs like healthcare premiums, property taxes, and university tuition usually tilt the scales quite favorably up north. For my family, the absence of five-figure healthcare costs and the fact that Canadian university tuition is a fraction of my med school debt have made a world of difference.
Pro Tip for Tax Planning:
Planning is everything. Aim to start your cross-border financial work 6-12 months before your move. Decisions like whether to keep your LLC, how to handle your U.S. retirement accounts, and how to time your shift for maximum tax efficiency are best made well in advance.
2. Healthcare: Peace of Mind You Can’t Put a Price On
Let me put it bluntly: Canadian healthcare has been a blessing for my family. When my child needed NICU care after birth, not only did we pay zero dollars out-of-pocket, but parking was covered, too. Compare that to the U.S., where I once received a $26,000 NICU bill as a medical student—thankfully written off after lots of pleading, but I wouldn’t wish that anxiety on anyone.
Canadian healthcare isn’t flawless—wait times are real, and specialty care can be subject to delays—but the financial peace of mind for major medical events is invaluable, especially for families.
3. Cross-Border Financial Complexities: Get Expert Advice
Here’s where things get tricky. U.S. citizens and green card holders are subject to U.S. taxes wherever they live. That means, as a tax resident in Canada, you’ll have to report your worldwide income to both Canada and the IRS. The key to avoiding double taxation is the foreign tax credit mechanism—if your Canadian taxes exceed U.S. ones (likely for most high-earning physicians), you won’t pay extra to the IRS.
If you’re self-employed, keep meticulous records! Canadian tax law allows substantial deductions for professional licenses, insurance, home office expenses (telehealth, anyone?), and more.
4. Should You Incorporate? Maybe, but Don’t Rush It
Incorporation can offer significant tax deferral benefits in Canada. If you leave money in your “professional corporation,” the first $500,000 is taxed at just 11–13%. You’ll pay more tax when you draw it as salary or dividends, but until then, growth is mostly tax-sheltered. Caveat: As a U.S. citizen, you face IRS “GILTI” rules (Global Intangible Low Tax Income) that can eat away at these benefits if you don’t structure your payouts properly.
My advice? Don’t rush to incorporate immediately after landing. Wait a year or two to track your cash flow, then decide if the benefits outweigh the costs—especially given extra accounting fees for U.S. tax compliance.
5. Investments and Retirement Accounts: What to Keep, What to Move
Moving your investments is a regulatory minefield. U.S. brokerages often restrict or freeze accounts once they know you’re a Canadian resident. For stocks and ETFs, an in-kind transfer to a Canadian brokerage typically works well, but U.S. mutual funds rarely transfer easily. Consider converting mutual funds to ETFs before you move, or work with a dual-licensed advisor for retirement accounts like 401(k)s and IRAs.
RRSPs (Registered Retirement Savings Plans): Like a 401(k), but contribution limits are based on Canadian earned income. The U.S. generally honors the tax-deferred status of RRSPs.
TFSAs (Tax-Free Savings Accounts): These are amazing in Canada (think Roth IRA without income limits), but the IRS doesn’t recognize the tax-free status, so any earnings must be reported to the U.S.
6. Key Tax Traps (and How to Avoid Them)
Investments in Canadian Mutual Funds/ETFs: These can be “PFICs” (Passive Foreign Investment Companies) for U.S. tax purposes, creating expensive filing requirements and punitive tax rates.
Sticky State Residency: Some U.S. states (California, New York) can still claim you as a resident for tax purposes if you don’t clearly sever ties. Don’t get stuck paying U.S. state taxes on worldwide income!
Expatriation (Giving Up U.S. Citizenship/Green Card): There’s an “exit tax” if you’re a “covered expatriate”—often triggered by net worth or high income. Get professional advice before making any final decisions.
7. If You Move Back: Watch Out for Canada’s Exit Tax
If life changes and you plan to return to the U.S., Canada can subject you to a “deemed disposition” (exit tax) on appreciated assets unless you move back within 60 months of your arrival. Timing, again, is everything!
Conclusion: Don’t Go It Alone
This is a lot to take in, and honestly, you shouldn’t try to go it alone. Both Sonya Dolguina and I cannot emphasize enough: Work with a cross-border tax advisor who knows both countries’ rules inside and out. It’s the difference between losing sleep at night and feeling confident as you make your big move.
If you want to dive deeper, check out “Your Move to Canada”—Sonya’s book—or reach out for referrals to experienced cross-border financial advisors.
Are you ready to start your Canadian journey, or do you have more questions on the move? Drop me a line at rob@interestingmd.com, or join the conversation on YouTube, TikTok, Instagram, and more. Make sure to like and subscribe to stay on top of our latest episodes and blog posts—The Interesting MD is here to help you find balance, prevent burnout, and achieve peace of mind on both sides of the border.
Written by Dr. Rob Beck, Host of The Interesting MD Podcast