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                                                                   Exhibit 10.16

                               SEVERANCE AGREEMENT

     This Severance Agreement (the "Agreement") is made this 25 day of October,
2004 by and between TLC Vision Corporation (the "Corporation"), a corporation
organized under the laws of the Province of New Brunswick and Elias Vamvakas
(the "Executive"), an individual and resident of the Province of Ontario.

     Whereas, pursuant to an Employment Agreement (the "Employment Agreement")
dated January 1, 1996 (as amended August 14, 1998; January 1, 2001; January 21,
2002 and May 13, 2002) Executive has been employed by the Corporation as its
Chief Executive Officer; and

     Whereas, the Corporation and the Executive deem it to be in their mutual
interest for the Executive to relinquish his role as Chief Executive Officer of
the Corporation in order to assume the position of Chief Executive Officer of
OccuLogix Inc., an affiliate of the Corporation, subject to the terms of this
Agreement.

     Now therefore, the parties hereby agree as follows:

1.   RESIGNATION OF EXECUTIVE. Executive hereby resigns as Chief Executive
     Officer of the Corporation, effective August 13, 2004. Executive shall
     receive his regular compensation through August 31, 2004 and shall be
     entitled to his bonus as set forth in the Employment Agreement, as amended,
     which shall be prorated for the months of January through August 2004.

2.   TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement, as amended,
     is hereby terminated as of August 13, 2004 with the exception that
     Executive shall continue to be bound by the provisions of Sections
     11,12,13,14 and 15 of the Employment Agreement.

3.   CONTINUED SERVICE AS CHAIRMAN OF THE BOARD. Executive shall, subject to the
     continued approval of the Board of Directors, continue to serve as Chairman
     of the Board of the Corporation.

4.   COMPENSATION AS CHAIRMAN. For his service as Chairman of the Board,
     Executive shall be compensated US$100,000 per annum, subject to any
     applicable taxes and withholdings.

5.   GUARANTEE OF SEVERANCE. The Corporation and OccuLogix shall enter into an
     agreement to guarantee a severance benefit to Executive as follows:

     a.   In the event Executive's employment with OccuLogix is terminated
          without just cause at any time prior to August 31, 2006 and OccuLogix
          is unable to provide Executive with a severance benefit at least equal
          to that which Executive would have received pursuant to Section 10(c)
          of the Employment Agreement, the Corporation shall guarantee payment
          of Executive's entire severance.

     b.   In the event Executive's employment with OccuLogix is terminated
          without just cause at any time between September 1, 2006 and August
          31, 2008 and OccuLogix is unable to provide Executive with a severance
          benefit at least equal to that which Executive would have received
          pursuant to Section 10(c) of the Employment Agreement, the Corporation
          shall guarantee payment of a pro-rata portion of Executive's severance
          declining ratably on a monthly basis between September 1, 2006 and
          August 31, 2008.

6.   HEADINGS. The inclusion of headings in this Agreement is for convenience of
     reference only and is not to affect the construction or interpretation
     hereof.

7.   INVALIDITY OF PROVISIONS. Each of the provisions contained in this
     Agreement is distinct and severable and a declaration of invalidity or
     unenforceability of any provision by a court of competent jurisdiction will
     not affect the validity or enforceability of any other provision hereof.

8.   ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
     the parties pertaining to the subject matter of this Agreement. This
     Agreement supersedes and replaces all prior agreements, written or oral,
     with respect to the Executive's employment by the Corporation and any
     rights which the Executive may have by reason of any such prior agreement
     or by reason of the Executive's prior employment by the Corporation. There
     are no warranties, representations or


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     agreements between the parties in connection with the subject matter of
     this Agreement except as specifically set forth or referred to in this
     Agreement. No reliance is placed on any representations, opinion, advice or
     assertion of fact made by the Corporation or its directors, officers and
     agents to the Executive, except to the extent that the same has been
     reduced to writing and included as a term of this Agreement. Accordingly,
     there will be no liability, either in tort or in contract, assessed in
     relation to any such representation, opinion, advice or assertion of fact,
     except to the extent aforesaid.

9.   WAIVER, AMENDMENT. Except as expressly provided in this Agreement, no
     amendment or waiver of this Agreement will be binding unless executed in
     writing by the party to be bound thereby. No waiver of any provision of
     this Agreement will constitute a waiver of any other provision nor will any
     waiver of any provision of this Agreement constitute a continuing waiver
     unless otherwise expressly provided.

10.  GOVERNING LAW. This Agreement will be governed by and construed in
     accordance with the laws of the Province of Ontario.

11.  COUNTERPARTS. This Agreement may be signed in counterparts. Each
     counterpart will constitute an original document and all counterparts,
     taken together, will constitute one and the same instrument. Executed
     counterparts may be delivered by telecopier.

     In witness whereof, the parties hereto have executed this Severance
Agreement as of the 25 day of October, 2004.


                                        /s/ Elias Vamvakas
                                        ----------------------------------------
                                        Elias Vamvakas


                                        /s/ Robert May
                                        ----------------------------------------
                                        Robert May,
                                        General Counsel


                                        /s/ Tina Moroney
                                        ----------------------------------------
                                        Tina Moroney,
                                        Witness


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