Disability insurance costs are not tax deductible for employees. Even so, if your employer doesn't have a short or long term disability plan, it is wise to purchase one yourself, especially if you have debt or dependants.
In any case, make sure you buy disability insurance, so that you will be covered in the case of medical emergencies which result in you being unable to work and earn income.
Excerpts from IT-428 Wage Loss Replacement Plans:
14. For benefits received by an employee under a wage loss replacement plan to be subject to tax in his hands under paragraph 6(1)(f), the plan must be one to which the employer has made a contribution out of his own funds. An employer does not make such a contribution to a plan if he merely deducts an amount from an employee's gross salary or wages and remits the amount on the employee's behalf to an insurer. In these circumstances, the employee's remuneration for tax purposes is not reduced by the amount withheld and remitted by the employer to the insurer.
17. It is a question of fact whether or not an employee-pay-all plan exists. An employer cannot change the tax status of a plan by adding at year end to employees' income the employer contributions to a wage loss replacement plan that would normally be considered to be non-taxable benefits. Where an employee-pay-all plan exists and provides for the employer to pay the employee's premiums to the plan and to account for them in the manner of wages or salary, the result is as though the premiums had been withheld from the employee's wages or salary.
If you are collecting benefits under a disability insurance plan, when the benefits are tax-free, you will not receive a T4A.
If you have paid a portion of the premiums, the T4A you receive will be for the gross amount of the benefits received, but you can deduct your contributions to the plan. Instead of entering the T4A amount from box 107 on Line 10400 (line 104 prior to 2019) of your tax return, you would enter the net amount after deducting contributions you made to the plan after 1967, if you did not use them on a previous year's return.