Thanks for the reply. I found this on the Canada Post website, and unfortunately I have had to deal with items found in the postal system, so I know I can't ship through Canada Post.
"Replica or inert munitions are non-mailable, as well as other devices that simulate explosive devices or munitions, including replica or inert grenades or other simulated military munitions, whether or not such items are for display purposes. These products are not permitted in the mail under any circumstances."
From CBSA Memorandum D19-10-2 - 5.(1) the Governor in Council may establish a list of goods, to be called an Import Control List, including therein any article the import of which the Governor in Council deems it necessary to control for any of the following purposes:
(c.1) to restrict the importation of arms, ammunition, implements or munitions of war, army, naval, or air stores, or any articles capable of being converted thereinto or made useful in the production thereof:
The Import Control lists
73. Bombs, torpedos, rockets, and guided or unguided missiles and all components and parts specifically designed therefor, and any other ammunition for the goods set out in items 70 to 72.
70 (1) Small arms that are rifles, carbines, revolvers, pistols, machine pistols, or machine guns.
(2) All components and parts specifically designed for the goods set out in subsection (1).
71 (1) Large calibre armaments or weapons and projectors that are guns, howitzers, cannons, mortars, tank destroyers, rocket or missile launchers, military flame throwers, recoilless rifles, or military smoke, gas and pyrotechnic projectors.
(2) All components and parts specifically designed for the goods set out in subsection (1)
72. Tanks and self propelled guns and all components and parts specifically designed therefor.
So obviously there are restrictions on the importation of military ammunition, explosives, etc, but it is not prohibited. I cannot find any reference to inert munitions for display or collection in any of the CBSA documents. I went to the local CBSA office and they could not provide me with any answers and recommended I contact other government agencies. Unfortunately, the item I am interested in is only up for another 2 days, so I doubt I will get any firm answers in time.