Introduction
Canadians who study medicine abroad face a distinct set of challenges when they return home to complete their training and enter practice. In September 2026, the BC Supreme Court released a significant decision examining the lawfulness of British Columbia’s residency allocation system and the obligations imposed on international medical graduates. We provide an overview of the Canadian residency matching system, summarize the Court’s analysis of jurisdiction, policy and Charter rights, and discuss the key takeaways for international medical graduates and the healthcare system.
Overview of the Canadian Resident Matching Service
In Canada, a medical school graduate must complete a postgraduate residency before they can become a fully licensed physician. Residency involves supervised, on-the-job training, with the length of a residency program depending on specialties and subspecialties. In British Columbia, the University of British Columbia’s Faculty of Medicine manages postgraduate residency programs, which are funded through annual allocations from the Ministry of Health.
The Canadian Resident Matching Service (CaRMS) operates a nationwide matching program that connects applicants with residency positions.[1] The CaRMS process involves a two-stream system, one domestic stream for Canadian Medical Graduates (CMGs) and one international stream for International Medical Graduates (IMGs). In British Columbia, there are roughly 294 CMG positions and 58 IMG positions (52 of which are limited to the practice of family medicine). Of the roughly 1,000 IMGs who apply each year, only the top 200 on the qualifying examinations are permitted to apply.[2]
In addition to completing the residency program, IMGs who secured a position also had to sign a return of service agreement committing them to practise for two to three years in an underserviced area of the province designated by the Minister (the Return of Service Requirement).[3] Failure to comply with the Return of Service Requirement could result in financial penalties up to nearly $900,000.
The decision: The Society for Canadians Studying Medicine Abroad v. The College of Physicians and Surgeons of British Columbia, 2026 BCSC 1723
On September 10, 2026, the BC Supreme Court released a significant decision addressing whether British Columbia’s system for allocating medical residency positions between CMGs and IMGs was lawful. The Court largely upheld the two-stream system as a valid policy decision, but found that the Return of Service Requirement imposed on IMGs lacked statutory authority and engaged their Charter rights, though it stopped short of finding a complete Charter violation.[4]
The Petitioners were the Society for Canadians Studying Medicine Abroad (SOCASMA), Oliver
Kostanski, who studied medicine in Poland, and Harris Falconer, who studied in Barbados. The Respondents were the College of Physicians and Surgeons of British Columbia (the College), the Minister of Health of British Columbia (the Minister), the University of British Columbia (UBC), and the Health Professions Review Board.[5]
The court’s analysis: Jurisdiction
The central jurisdictional question before the Court was who has authority over admission to residency training in British Columbia.
In British Columbia, a person cannot train as a resident without being registered with the College and cannot register in the College’s Resident Class without being enrolled in UBC’s residency program. The Petitioners described residency training and College registration as “two sides of the same coin”.[6] The Petitioners’ core argument was that because the College is the gatekeeper to the medical profession under the Health Professions Act (the HPA[7])and because residency training is the practice of medicine (albeit supervised), the College must also have jurisdiction over who enters residency training. On their view, UBC’s Faculty of Medicine was not an independent academic institution but rather a service-provider designated by the College to manage and operate residency training. They argued that neither the Minister nor UBC had any authority to impose the two-stream system because the Legislature had given that authority almost exclusively to the College.
The Court rejected this argument. It acknowledged the College’s broad authority to regulate entry into the profession but drew a clear distinction between two different functions: UBC decides who to admit to its residency programs, constrained by the Minister’s funding allocation, while the College determines whether those admitted meet the College’s registration standards.[8] In short, residency training and College registration may be “two sides of the same coin,” but the two sides remain distinct, each serving its own purpose. Being the gatekeeper to a profession means setting and enforcing the standards candidates must meet, not selecting the candidates themselves.[9]
The HPA is the statute that defines the College’s powers. According to the Court, the HPA governs regulation of the medical profession, things like practice standards, registration requirements, and professional discipline—but not the education or training of health professionals.[10] The Court found nothing in the HPA’s text, context, or purpose suggesting that it governed residency training programs or admission to those programs. The Court therefore concluded that neither UBC nor the Minister was acting under or contrary to the HPA by adopting the two-stream system.[11] In practical terms, the College was correct to say it lacked jurisdiction over the two-stream system and could not compel UBC or the Minister to change it.
Policy immunity and the limits of judicial review
Having found that the College lacked jurisdiction over the two-stream system, the Court next considered the role of the Minister, who accepted responsibility for implementing that system.
The Minister’s policy was carried out through annual funding letters to UBC specifying the number of CMG and IMG residency positions the province would fund each year.[12] The Court characterized this as a policy decision made under the government’s executive authority: the Minister determined, as a matter of public policy, to fund a certain number of residency positions and allocate them between CMGs and IMGs in a way that favours CMGs.[13]
The Judicial Review Procedure Act (the JRPA) establishes the grounds on which a court may review exercises of public authority in British Columbia. Under the JRPA, judicial review is available where the challenged conduct involves an exercise of statutory power or affects a person’s legal rights, interests, or liberties within the meaning of the JRPA.[14] The Court found that the Minister’s allocation of residency positions was an executive policy decision, not an exercise of statutory power, and did not determine any existing legal entitlement of IMGs. Specifically, IMGs had no legal right to compete on an equal footing with CMGs for all available residency positions (the relief they were seeking) and no entitlement to have the two-stream system dismantled.[15] The allocation was not arbitrary. It reflected a deliberate policy to maximize residency opportunities for graduates of Canadian medical schools.[16]
The Return of Service contract: Where policy crosses into regulation
The Return of Service Requirement proved to be the critical exception in the Court’s analysis.
The Minister argued that these agreements were ordinary private contracts entered into under the Crown’s general contracting capacity.[17] If the Crown were acting as an ordinary private contracting party, the return of service contracts would be purely private law matters and not subject to judicial review nor require any statutory authority. But the Court disagreed. The Court found that the Crown was not acting as an ordinary private party. Instead, the Crown was using its contractual power to coerce a segment of society into particular conduct, backed by substantial penalties.[18] The Court held that imposing specific obligations on a class of persons (with financial penalties for non-compliance) is regulatory in nature and requires statutory authorization.
An IMG who matched to a residency position had no real choice but to accept the Return of Service Requirement, or abandon years of medical education and any prospect of practising medicine in British Columbia.[19] In 2017, for example, the penalty for breaching a return of service agreement was $480,375 for a family medicine practitioner and $897,581 for a psychiatry specialist, and these amounts were not prorated based on how far into the service term the physician had progressed.[20] The Court found that no legislative or statutory authority to ground these penalties existed.[21]
The Court was careful to note that it was not commenting on whether a properly authorized return of service program could be reasonable. The problem was simply that the Minister had acted without the necessary legal foundation.[22]
Section 7 of the Charter: Liberty and the choice of where to live
The Court also considered whether the two-stream system and the Return of Service Requirement engaged the Canadian Charter of Rights and Freedoms. Section 7 of the Charter provides that everyone has the right to life, liberty and security of the person and the right not to be deprived of those rights except in accordance with the principles of fundamental justice: the basic legal principles that underlie our notions of justice and fair process, including that laws must not be arbitrary, overbroad, or grossly disproportionate in their effects. A section 7 claim therefore requires two things: first, state interference with one of those protected interests (life, liberty or security of the person), and second, interference that does not accord with the principles of fundamental justice.
Regarding the two-stream system, the Court found that no section 7 liberty interest was engaged. Section 7 does not protect a right to attempt to pursue a particular profession. Moreover, the finite number of residency positions (roughly 350 total) meant that even if the two-stream system were dismantled, and CMGs and IMGs competed together on equal terms, the vast majority of applicants would still be unable to secure a position.[23]
The Return of Service Requirement, unlike the two-stream system generally, did engage a liberty interest under section 7 of the Charter. It did so because the obligation deprived an IMG of the fundamentally personal choice of where to live for two to three years after residency, when the IMG had to practise in a location designated by the Minister.[24] The Court recognized that this choice is connected to autonomy, dignity, family life, and care of loved ones.[25] Although an IMG could technically reject the residency position, that was not a meaningful choice when it meant sacrificing years of education and any prospect of becoming a licensed physician.[26] The Court therefore found that the Return of Service Requirement engaged a liberty interest under section 7, but did not decide whether the resulting deprivation was inconsistent with the principles of fundamental justice, and therefore did not find a complete section 7 violation. Instead, it referred the matter back to the Minister to assess whether the requirement accords with the principles of fundamental justice and to reconcile the liberty interest with the objective of addressing physician shortages in underserviced areas. In other words, rather than striking down the requirement, the Court left it to the Minister to reconsider and potentially redesign it to ensure it complies with constitutional standards.
Takeaways
The Court’s declaration that the Return of Service Requirement lacks statutory authority could reshape how British Columbia manages the obligations imposed on IMGs.
The decision also arrives against a sobering backdrop. An estimated 6.5 million Canadians lack a family doctor, and the shortage continues to worsen.[27] British Columbia has among the fewest medical school seats per capita of any province, and one of the highest percentages of residents without family doctors.[28] Against that reality, the system’s effective exclusion of IMGs from residency positions each year takes on added weight, and the removal of the Return of Service Requirement (in the face of no present alternative) threatens already limited access to care in rural parts of the province.
At the same time, the Court recognized that the policy of favouring CMGs is not without justification. The province invests substantially in undergraduate medical education, and the Court accepted that there is value in structuring residency opportunities to maximize positions for those who trained in Canadian medical schools. Favouring CMGs also helps attract high-calibre students to Canadian medical programs by giving them a reasonable expectation of securing a residency position. The Court emphasized that it was not for the judiciary to assess whether this was good or bad policy, finding that there was at least a reasonable basis for the current allocation.
For IMGs, the decision offers both encouragement and realism. The two-stream system itself survived judicial scrutiny as a legitimate exercise of government policy. But the Return of Service Requirement did not. The Court’s recognition that the obligation engages s. 7 liberty interests opens the door to further constitutional scrutiny if the province attempts to reimpose these requirements, even with statutory backing.[29]
If you have questions about the recent BC Supreme Court decision or its implications for healthcare regulation or international medical graduates, please contact the authors, Kay Scorer and Liam Edmondstone.
[1] SOCASMA at paras 21 to 27.
[2] SOCASMA at paras 5 to 9.
[3] SOCASMA at paras 5 to 9.
[4] The Society for Canadians Studying Medicine Abroad v The College of Physicians and Surgeons of British Columbia, 2026 BCSC 1723 [“SOCASMA”] at paras 1 to 3.
[5] SOCASMA at paras 2 to 4.
[6] SOCASMA at paras 87 to 91
[7] Since replaced by the Health Professions and Occupations Act, SBC 2022, c 38, which came into force on April 1, 2026.
[8] SOCASMA at paras 106 to 113.
[9] SOCASMA at paras 117 to 118.
[10] SOCASMA at para 109.
[11] SOCASMA at para 120.
[12] SOCASMA at paras 137 to 143.
[13]SOCASMA at para 159.
[14] SOCASMA at paras 172 and 184.
[15] SOCASMA at para 182.
[16] SOCASMA at para 55.
[17] SOCASMA at para 188.
[18] SOCASMA at paras 203 to 206.
[19] SOCASMA at paras 204 and 283 to 285.
[20] SOCASMA at para 9; see also para 185.
[21] SOCASMA at paras 206 to 210 and 349.
[22] SOCASMA at para 209.
[23] SOCASMA at paras 265 to 269.
[24] SOCASMA at paras 269 to 287.
[25] SOCASMA at paras 271 to 277.
[26] SOCASMA at paras 283 to 285.
[27] CBC News, “Canadians need doctors” 25 February 2025.
[28] K Li et al, “Biopsy of Canada’s family physician shortage” Family Medicine and Community Health 11.2 (2023).
[29] SOCASMA at paras 348 to 352 and 356 to 358.
