http://www.airforce.forces.gc.ca/16w-16e/nr-sp/index-eng.asp?id=443 said:
According to Captain Carl Gauthier of the Honours and Awards section at DHH, there are 3 main types of national honours: orders, decorations and medals. Orders and decorations rank higher than medals and bring some specific privileges that do not apply to medals, such as the use of post-nominal letters (OMM, MSM, etc). In general, orders and decorations are in the shape of a cross or star, while medals are usually round. Finally, orders, decorations and medals are (generally) worn in that order, from left to right, although there are many exceptions - the CD is one.
"In the old British system," explains Captain Gauthier, "long service awards were divided into two major categories: long service decorations for officers... and long service and good conduct medals for NCMs. When the CD was created in 1949 to replace all these British awards for Canada's armed services personnel, it was decided that the same award would be used for all services and for all ranks."
According to Capt Gauthier, the decision to make the CD a single decoration for all was made so that officers would not be denied the use of post-nominal letters for a long service award. As a result, Canadian Forces NCMs became the first in the former British Empire to receive a decoration (and be entitled to post-nominal letters) as a long service award. "However," clarifies Captain Gauthier, "although it is a decoration, the CD still ranks with the other long service medals in the order of precedence, just like the old British awards did."
So there you have it. Indeed, a decoration... but ranked with medals!