(a) Yes. (b) No.
Before I answer the question, why did I ask it today? I asked it today because April 9th is Vimy Ridge Day. In Canada, Vimy Ridge Day is a point of National Pride because it is the day that many historians will tell you is the day that Canada came together as a nation in 1917 in the First World War. It commemorates the Canadians victory at Vimy Ridge in France in 1917.
1917 is also the year that Canada introduced income taxes. A piece of tax history. Now to answer the question. Do veterans get any tax breaks? Yes they do but very limited.
It is almost impossible to find on the Veterans’ Affairs site or the Canada Revenue Agency site. In fact much of the Veterans’ Affairs site is in disrepair.
Try this link for example: www.veterans.gc.ca/eng/resources/pension-for-life. On the CRA site it has a small mention here. Amounts paid by Canada or an allied country (if the amount is not taxable in that country) for disability or death of a war veteran due to war service.
See publication 525. There are several non-taxable benefits mentioned there.