Hey guys,
Thanks a lot for your responses. As NicholasCage pointed out, when admitted to psychology Master's programs in Canada, it is usually with the expectation that the student will continue on to the PhD program if they complete the Master's satisfactorily. I believe that this is the case because the institutions invest considerable resources into the students, both financially and personally in terms of time and effort. That being said, they do not like to officially "guarantee" the spot, so students must still technically "apply", but it's more of a formality than anything else.
As for the reasons why I want to switch programs, this has to do with current funding and job prospects. The other institution would have provided me more funding and co-op opportunities where I could gain experience, and much better job prospects post-graduation. I'll have the opportunity to go into academia or industry right off the bat, without having to do a post-doc. I also enjoy the content material and the PI who accepted me is exactly what I would want to study if I was doing I/O research. The particular school I was accepted to for my Master's was also in a terrific city I would enjoy living in.
My current school, while it is great and I love my PI and is also in a great city, the funding and job opportunities are very bleak. I'm not sure if my PI will even have funding in the coming years (for RA funding, conferences, running studies, etc). and I already know he is very resistant to allow his students to do any applied work while completing their degree. I'd also most likely have to do a post-doc after obtaining my PhD and then face a very competitive job market. I'm not sure I'd want to spend the next 5 years or so earning a PhD while I'm practically broke and working my ass off, just to have to do a post-doc and then facing a job market where I'll continue being broke or having to move to the middle of no where, or both.
Anyways, hopefully that clarifies things a bit. I'm thinking now I should apply to a number of I/O programs for my PhD and just tell my PI in September when I need to start thinking about applications. While there is no guarantee I'll even get into a I/O PhD program however, so I'm not sure what I'd do if I wasn't accepted to any programs... But i'm trying not to think about that and what a terrible mistake I made.
Thanks