In this case the woman has almost $120,000 in annual retirement income while the average household income in Canada is $75,000. This would leave a lot of room for lifestyle adjustments such as using a car sharing service rather than leasing.
The condo fees sound excessive. A $1.3 million condo in Vancouver would be a 2 bedroom and fees are usually $350 - $500 and given that the market has peaked sell. Rather than rent purchase in the suburbs buying a house with a suite that would not only create additional income but would leave the family with an income property.
As for the line of credit it is a trade off as to the interest paid on the line and the income earned from investment that would be used to payoff the line. If you were to move to an income producing home payout the LC and recover the money in the mortgage to make the interest deductible from the rental income. The income would also cover the holding and maintenance costs.