If you borrow money to buy an income earning investment, interest expense incurred is deductible. Income for this purpose includes dividends and interest, but not capital gains. Consult your accountant for any tax implications regarding interest deductibility.
Interest on money you borrow to contribute to a registered retirement savings plan (RRSP), registered pension plan (RPP), tax-free savings account or for the purchase of personal assets such as your home or cottage, is not deductible. To deduct interest expense you need to have an income purpose. Any income obtained inside one of the above registered accounts is not taxable, therefore any interest expense incurred is not deductible.
Interest expense on money you borrow to buy common shares is generally deductible whether or not you actually receive any dividends. The reason for this is that common shares have the potential for paying dividends. Your accountant can advise you on tax implications regarding purchase of common shares.
Your accountant provides tax advice regarding deductibility of interest expense and tax strategies to minimize the interest cost of borrowing.