Generally, the premiums will be deductible if the loan is used for the purpose of earning income from a business or property.
However, the deduction for a taxation year is limited to the “net cost of pure insurance in respect of the year”. Furthermore, the deduction is limited to the amount “that can reasonably be considered to relate to the
amount owing from time to time during the year… to the institution under the borrowing”.
The “net cost of pure insurance” is determined using actuarial principles as described in the Income Tax Act Regulations (your insurance company should be able to provide you with this figure).
In terms of the amount “that can reasonably be considered to relate to the amount owing from time to time during the year” under the loan, the Canada Revenue Agency provides the following example: