Why?

If you're not gonna go over the cap or get anything out of it at all, why would uouactually pay a team to give you a dead contract that helps in no way, shapenor form?

Vancouver will also add a hand delivered gift basket to that trade

Ill be completely honest im not too familar with ltir does this mean that in this scenario the leafs could go over the cap by 3.5m?

Kinda, ltir basically means you can have a single contract over the cap by that specific amount. A 'free' replacement player if you will.
But, it also prevents you from banking cap space for the trade deadline and doesnt work against performance bonus'. So unless you're tampa or vegas and need to use it to keep your teams best players or at full strength, it generally does more harm than good