As part of your pay and compensation package you are given, amongst other things, a salary and 25 days of leave a year. Military leave is paid leave and whether you take it or not you are paid and taxed at the same amount. This is the mistaken comment of having already paid tax on your accumulated leave, you paid tax on the income you earned during the period.
First Scenario.
If you didn't buy your leave out, you would have expended your leave sometime during your military career. In the example you provided, you didn't expend all of your leave in 1990, but let's say in 1991, you decided to expend all of your annual and the five days you accumulated from 1990. So in 1991, you took 30 days of leave. You still get paid the same salary and pay the same tax.
Second Scenario
If the military comes out with a "buy out of accumulated leave package", they are purchasing each day of leave for a day's pay. This is additional income as the CF is buying something off of you that you have accumulated - "paid leave days". As it is deemed additional income, you are taxed on it. If you did this in 1991, your income for the year would be higher than in 1990, hence additional tax owed.
Third Scenario
You keep your accumulated leave all through your service career and decide to retire in 2006. You use your accumulated leave to enable you to take an extended vacation prior to collecting you pension. Over your past 25 years, you accumulate 25 days of annual leave. This final 5 weeks of leave count as income and you are taxed on the income.
Hence, no double taxation.
The buy out was very popular for a short term cash infusion or topping up your RRSP portfolio.