Liberal defence critic Joyce Murray says the case involving Master Cpl. Kristian Wolowidnyk raises questions of integrity and honour.
"He served his country, fulfilled his promise, and now the government appears to be going back on theirs," Murray said Monday.
"This sort of quiet reversal after the media attention has died down raises clear issues of good faith."
The former combat engineer made headlines last November when it was revealed he tried to take his own life after the army began the process of giving him a medical discharge because of his post-traumatic stress disorder.
The military backed down when his case became public, but last week reversed itself and said he doesn't qualify to remain in the military.
NDP defence critic Jack Harris said Wolowidnyk's story is "heartbreaking" and he is not the only soldier being dismissed before qualifying for full benefits.
"They're being dismissed with total disregard for their well-being after they've served the country," Harris said.
Wolowidnyk and wife Michele were told at a meeting last Tuesday with the Edmonton joint personnel support unit that the offer for a longer stay with the military — made in the aftermath of public attention — was withdrawn because the base surgeon said there was no medical reason preventing the soldier from working or going to school.
"That's ridiculous" given his post-traumatic stress, said New Democrat MP Christine Moore who is a nurse and served in the military.
Michele Wolowidnyk wrote a letter to Defence Minister Rob Nicholson and Chief of Defence Staff Gen. Tom Lawson last week, saying the base surgeon has never met her husband.
She accused the department of stringing her husband along until the media attention died down.
A spokeswoman for Defence Minister Rob Nicholson suggested on Sunday that the government would not interfere in the decision to release Wolowidnyk, who served in Afghanistan in 2009-10.
Justice Minister Peter MacKay, who spent six years in the defence portfolio, stood to answer questions in the House of Commons on Monday, saying there is an effort being made to help him transition.
"In fact, we are assured by the military that every effort is being made to respect his wishes and those of his family and that this transition is as smooth as possible for him," said MacKay.
A veteran's advocate, who resigned as a senior member of the Joint Personnel Support Unit in Eastern Ontario, condemned the reversal by National Defence.
Barry Westholm, who was a soldier for more than 30 years, says it's a breach of the code of trust and integrity that soldiers live by.
Once an officer — or authorities — have made a promise, regardless of whether it's in writing or not, the institution is bound to live up to it, he said.
In her letter, Michele Wolowidnyk wrote that her husband was reminded repeatedly that "he isn't an amputee," something she says makes a mockery of the Defence Department's claim that psychological injuries are taken as seriously as physical wounds.
Westholm says he was floored by the statement.
"Wow. That is so, so demeaning. I can't even begin to describe it," he said. "They are choosing policy over people."
Westholm made news last year when he ripped up his Conservative Party of Canada membership card in frustration over the continuing fight veterans face for services and benefits.
He said Wolowidnyk should file an immediate grievance within the military, a process that could put a temporary hold on his release. In addition, officers at the support unit in Edmonton could convene what's called a "complex board," where the particulars of his case could be discussed.
The board has the power to grant him another three years in the military, something that would take him up to 10-year mark of service when he would qualify for an unrestricted pension.
In addition, the chief of defence staff could exercise his discretion and not sign his release papers.
If both of those options are not exercised, Westholm says, it's clear the military is only interested in getting rid of Wolowidnyk.Suggest a correction