Not a dual citizen. Green Card = US Resident Alien, not US citizen. EDIT: Oh, you mean the child is a dual citizen.

Unless she gave up the Green Card when she moved back to Canada, she still has to file a US 1040 and pay US tax on her worldwide income. She may be eligible for the foreign earned income exclusion or foreign tax credit.

Filing 1040s for her in prior years was the correct way to file.