The policy has to say the have “the right to estimate and deduct”. If that wording is not in the actual policy, then they are on shaky ground to do so. If the policy says the words “right to estimate and deduct CPP” then that is all the authority that is required. You don’t have to look for cases or judicial decisions.
Sometimes insurers will get you to sign a form (separate from the policy) that says you agree to give them the right to estimate and deduct. These forms are very dubious in terms of their legal effect, unless, the Policy says you will have to sign such a form (which some policies do say this).