According to the Canada Revenue Agency (CRA), there are deductions you may apply against your US military pension. Under Line 11500 - Other pensions and supernnuation, you are to report your gross foreign pension income received. Due to the tax treaty between the two countries, you can deduct any U.S taxes paid on your pension, as well as 15% of any U.S Social Security Benefits.
Note: If you have been receiving U.S Social Security benefits continuously since 1995, or if you are receiving death benefits for a spouse, you may be eligible for a 50% deduction.
For more information, check out: TurboTax - Are US pensions taxed to Canadians?
Also, Canada Revenue Agency (CRA) - Foreign Pension
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