Yeah, that's the CANFORGEN. I did actually ask about this to my CO and was in fact able to get paintball approved as a unit activity, taking everyone to TNT Paintball here in Victoria instead of going to work every six months or so.
A navy crew playing paintball looked like this, if you're wondering: HMCS Protecteur @ TNT Paintball, November 19th, 2010 - YouTube
Like a bunch of retards trying to hump a doorknob.
Anyway, as I was saying section 5 pretty much describes extreme sports as being stuff that involves speed, height, physical exertion and specialized equipment. That's vague, but on CO approval should involve things like paintball and airsoft.
And it's certainly not on the list of exceptions listed in section 7.