You need to call the pack
method on the canvas before you start the loop:
from Tkinter import *
import time
mGui = Tk()
mGui.title('GUI Example')
mGui.geometry('1024x576+10+30')
#Canvas
canvas_1 = Canvas(mGui,height=500,width=500,bg='grey')
#################
canvas_1.pack()
#################
for i in range(1, 500):
time.sleep(0.5)
canvas_1.create_line(0,0,i,i)
canvas_1.update()
mGui.mainloop()
Otherwise, the canvas will not be placed on the window until after the loop exits.