It's called the Post-Graduate on Scholarship (PG on Schol) program, and it's only available to ROTP cadets (civi U or RMC). You apply early in your fourth year, and your standing is based on your grades in second (must be 75% average) and third (must be 80% average) years, plus your military ranking, your athletic score (if you pass your expres test you get full marks I believe), and your bilingualism profile. All these scores are made into one overall score, and you are ranked. The top 6 cadets will be offered their choice of studies (in Canada unless you win a prestigious external scholarship like the Rhodes), and the next 6 in the ranking will be told what they can study (based on their trades). Your trade has to approve of you doing your masters, some had to drop off the list later because they were told they were needed in their trade now rather than 2 years down the track. There were about 30 applications (from RMC and civi U) the year I applied (and got in the top 6). Even if you're ranked below the top 12 (there's only 12 spots a year), you may actually end up getting offered a spot because others turn it down for various reasons. If you go to RMC for your postgrad, you'll get an automatic DRDC scholarship. If you go to another university, you'll either need a "prestigious" scholarship from a list you'll be given, or any scholarship that's $10,000 or more per year of study is considered prestigious. It's not impossible to get approved for PG on schol, but most of the people who were approved had their grades in the very high 80s or 90s, so if you're not an academic superstar, it's unlikely you'll get one. Grad school is insanely hard (even compared to RMC life), so you need those high grades to be able to survive academically. In my program (at the Norman Paterson School of International Affairs), you can't have any grades below a B or you fail out of the program.
Hope that helps!