All my life I've been giving unsolicited advice to people about having their correct names on
all of their documents but no one listens to me
I remember reading your thread about your wife's name. And I gave it a lot of thought too but frankly I don't know for sure what you should be doing.
If I were you, I'd let her current passport remain as it is right now. Her name isn't incorrect on the passport, it's just all put together in one section instead of being broken up into "Given name" and "Surname". Honestly, I don't see a problem with that and can't imagine why she'll face any inconvenience in Canada.
Hope this helps. Good luck.