Canassurance, Compagnie d'Assurance-Vie Inc. v. The Queen, 94 DTC 6186, [1994] 2 CTC 37 (FCA) -- summary under Paragraph 20(1)(c)

The taxpayer, which was a mutual life insurance company without share capital, received subscriptions to its reserve fund from the Quebec Hospital Service Association and paid interest ("on a sporadic but constant basis") on such subscriptions at a rate of 5% per annum in those years in which it agreed with the Association that it was able to pay interest. The subscription proceeds advanced to the taxpayer were found to be loans given that the Association could not act in any other capacity than that of a lender (for example, it was not a member of the taxpayer). Furthermore, the payments of interest made in the years in question were pursuant to agreements to pay such amounts, notwithstanding that they were not reduced to written form. Accordingly, the interest was deductible.