CRA maintains general prohibition on deducting disability policy premiums

CRA considers (subject to a limited exception in IT-223, para. 2 for overhead expense insurance) that the premiums paid under a disability policy are non-deductible, and the benefits received thereuder are non-taxable, even in the case of a policy of a corporation on its shareholders which it was required to obtain as a condition to receiving a loan to acquire a business asset.

Neal Armstrong.  Summary of 8 October 2013 T.I. 2011-0428931E5 F under s. 18(1)(a) – income producing purpose.