Retiring from the Canadian Armed Forces (CAF) and becoming an independent contractor can be very much a win-win proposition. The CAF has a good chance at keeping your expertise in related fields, you can make a little more money, collect a pension, and you can move from contract to contract as you desire. The downside is that there is considerable administration that needs to be conducted to set yourself up as a business and then maintain that business as well as conducting contract work. However, there is significant satisfaction in having complete control over the work you choose to perform.
The reason this option works really well for pensionable retired personnel is that the Public Service Health Care Plan is available to ensure health care for your family, and the pension can fill in gaps of income from switching between contracts. There is one big caution, however: if one takes a contract as a way to reduce taxes but continue to work for one organization long term, then you can potentially run afoul of Canada Revenue Agency (CRA) and their definition of an employee. There is at least one case in 2022 of a contractor being taken to court by CRA because the contractor claimed business expenses but worked for one government agency for a long period of time. The contractor lost the case and was forced to pay back a large amount of back taxes. To avoid this concern and remain above-board in paying the right amount of taxes, it is wise to become an independent contractor committed to taking on multiple contracts and remain committed to the spirit of an independent contractor with every contract taken.
To get started, contacting a local recruitment firm for contractors (Calian is probably the best known, but there are many others scattered across the country) is important in your transition for two reasons. One, they can advise how much work is available for someone with your skill set, which gives you an idea of how likely it will be to find work once retired. Two, if they have options available, they may sponsor you for a transfer of your security clearance from the Department of National Defence to the recruiting firm through Public Services and Procurement Canada’s (PSPC) Contract Security Program (CSP). This is conducted by the Company Security Officer (CSO) on your behalf. If you want to minimize time between retirement and your first contract, it is important to start this part of the process some months before your departure.
According to PSPC, a contractor may begin work when the duplication of the security clearance request shows as pending, and the government procurement officer managing the contract verifies with CSP that the employee is eligible to begin work on the contract. However, this has not been my experience: it appears that some companies will wait for the security clearance transfer to be approved before they initiate any contract talks. Not all companies are the same, so it may be well worth the time to explore options at multiple firms so that you have choices. Good luck!