Regarding whether a taxpayer who rented her co-ownership interest in a house to her stepfather and mother, CRA stated:
Guide T4036, Rental Income 2009, states that if a taxpayer rents property to a family member for less than the rent that would be charged to another tenant, resulting in a rental loss, the taxpayer cannot deduct that loss.
Furthermore, if rental expenses are always higher than rental income, rental losses may not be deductible because the rental activities would not be considered a source of income. However, if the rent is the same as what you would charge another tenant, you can claim a rental loss if you reasonably expect to make a profit.