snowbirding,
I do not profess to be conversant with Canadian taxation. But in the US scholarships that cover tuition are tax free. Any portion that doesn't is taxable income.
For dependents, as I said, scholarships that cover tuition are treated as earned income in some places, specifically for computing the dependents standard deduction, and unearned income in others, specifically for determining whether the dependent must file and for the kiddie tax. Scholarship monies not used to pay tuition are always earned income.
For the family member's 2020 tax return, the calculations I gave showed that it was immaterial whether the scholarship was taxable income or not. In the US she has to file and will owe no tax assuming that was her only income.
For later tax years, the situation may be different depending on her age and specific financial situation.
