OTTAWA - The appointments of Rob Nicholson and Julian Fantino to oversee defence and veterans affairs signals both departments are in for some tough love, observers said Monday in the wake of cabinet makeover.

The shuffling of Peter MacKay to the justice portfolio from defence removes one of the major roadblocks Prime Minister Stephen Harper faced in overhauling National Defence along the lines he has wanted since a report on military transformation two years ago.

Nicholson, former justice minister, will be able to implement long-sought changes without worrying about allegiances MacKay accumulated in years as a stalwart supporter of the troops, says a defence analyst.

"If he is carrying a message from the prime minister, he can implement changes ... without any worry of damage to his reputation as a minister," said Douglas Bland, a retired soldier and chair of the defence management studies at Queen's University in Kingston, Ont.

"In fact, he could be seen as someone coming in to sweep clean the old process."

Nicholson inherits a department struggling to define itself post-Afghanistan and to live within a shrinking budget that could be as much as $2.5 billion lighter by next year.

It is a mess, said historian Jack Granatstein, a senior fellow the Canadian Defence and Foreign Affairs Institute.

"They have a (chief of defence staff) who is likely going to be more pliant than the previous one. They have a new minister who knows, near as I can tell, nothing about DND or the military, and this may be the time to make DND change."

Fantino's appointment in the sometimes volatile veterans affairs portfolio was greeted with caution by advocates, some of whom worry whether the former top cop in Ontario will have a sympathetic ear for restless ex-soldiers dealing with the aftermath of the war.

"If the objective is to put Minister Fantino in there to bring a state of order, or blunt our efforts on advocacy, good luck with that because it's not going to work," said Mike Blais, president of Canadian Veterans Advocacy.

"We have expectations, particularly of the new minister because of his law-enforcement background."

The swap of responsibilities between MacKay and Nicholson also brings an end to the perceived political rivalry between Harper and MacKay, which seemed evident over two years ago when the prime minister stripped military procurement responsibilities away from the defence minister and created an associate ministerial post.

MacKay's responsibility was further eroded when Public Works took over the stealth fighter and fixed-wing search plane programs.

Bland said it may have been an attempt at damage control, given the mushrooming procurement fiascoes; or it may have been an attempt at the time to entice MacKay to quit.

"I was a bit surprised MacKay didn't say: 'To hell with you. I'm resigning.' But he stuck around," said Bland.

Granatstein was more blunt, saying MacKay was "done in by the centre," a reference to the Prime Minister's Office and its bureaucratic arm, the Privy Council Office.

A spokeswoman for Harper confirmed Monday the shuffle eliminates the position of associate defence minister and returns purchasing responsibility to the defence minister.

Bland said the cabinet shuffle did not address a fundamental question of who is really in charge of military procurement, a problem that has plagued National Defence and vexed the Conservatives with some of their biggest political embarrassments.

MacKay, one of the country's longest-serving defence ministers, faced his share of political controversy, including allegations he hitched a lift on a search-and-rescue helicopter while returning from vacation.

Perhaps more damaging, MacKay wore the controversy over the planned purchase of the F-35 stealth fighter. The auditor general said National Defence and Public Works hid the enormous cost and didn't do their homework to justify it.

MacKay's political obituary was written countless times in a department that seemed never far from fiasco, especially throughout the Afghan war.

Despite that, MacKay remained popular with the troops who saw him participating in boot camps and other physical activities.

"He rolled around in the mud with them," said Liberal defence critic John McKay. "I'm sure they appreciated that, and it's not something Rob Nicholson will be doing."

The problem was that MacKay rarely said "no" to the brass and the shuffle seems to be an attempt to establish more civilian control over the military, said McKay.

At an event last week to inaugurate a memorial to those killed in Afghanistan, MacKay described being defence minister "as the single greatest honour" of his life.