Short Answer: My BTDT advice would be to check out the LD schools in your area. You may find some answers there or at least some peace of mind.
Long Answer: At this point my DD9 has been diagnosed with just about every possible LD and is in out of district placement at a spec Ed school. When she was first identified the summer between K and 1st we wanted her at a small, supportive private where we would be paying out of pocket for OG tutoring in addition to rather hefty tuition. Our district convinced us to send her to the public for a year arguing that no one really had a handle yet on what all her difficulties might be and the cost could potentially be staggering to provide all the services ourselves, if we could even access all the needed services outside a public school environment. It was mentioned at one point that they might even be able to remediate in a year and then we could place her at the private if we wanted. That obviously didn't happen. Instead we kept adding diagnoses and services until we got to the point where her IEP looks like a paperback novel and it became clear that her needs could not be met in the local public. I now use the phrase "profoundly learning disabled" and everyone in the room nods their heads in agreement.
Now in 4th grade she is in her 4th year of daily, intensive reading intervention (they are using Wilson) and she is approximately half a grade level behind in her ability to decode. (But 5+ levels ahead in comprehension). She has been working with OT's since she was 5 but it is clear writing by hand will not be her method of communicating - she is working on keyboarding and other AT skills as well as starting on cursive to see if that helps.
She is making slow, steady progress with the emphasis on s-l-o-w. That's fine though - early on I found it hard to believe she would ever learn to decode but now she is indeed reading. Slowly, with difficulty and many, many errors based on context clues, but she IS reading. Now I am starting to think of all her issues as being divided into 2 categories - which ones will she be able to remediate even if it takes years and which will she never really be able to overcome so we need to focus on real world work around solutions. My goal is to get her to a point that she can function in the real world. To me that means being able to encode well enough for word prediction software to guess what she means to type and to decode well enough to be able to select the correct option from the word prediction list.
I'm not sure if this helps much but I guess what I am trying to say is don't worry about labeling it moderate or severe. Give her whatever support you can and buckle in for the ride. You don't yet know where this path will lead so don't worry about things that may never happen. Find out your options and make informed decisions rather than scared decisions. I'm sorry I'm not familiar with the Canadian system to know what she is entitled to. Here in the US our local school district HAS to provide services. Ours couldn't meet her needs in district so they are sending her to the spec Ed school. I would guess that the French immersion program which would be a fabulous opportunity for an NT kid may be making things more difficult for your DD.
Based on my experience well meaning but clueless school staff are just that - both well meaning and clueless. If she can't get the intensive help she needs in that school it is probably not the best place for her. And I have to ask - do you feel qualified to do this intervention yourself? I know that neither DH nor I could have possibly done that with our DD. I know one mother, a teacher, who trained in an OG type program (sorry but I'm not sure which one), quit her job and decided to tutor her dyslexic son full time at home. It didn't work and he is now in his third year at an LD school where he is apparently making huge strides. I think they regret the years they lost not having placed him there sooner.
Good luck and know that you are not alone. Please keep us posted.
{hugs}
