for $300 CDN, I would say yamaha HTiB if you MUST have surround.
Otherwise, go the two channel route.
I forgot the conversion, but let's just sayin $250 us.
--2 channel
You can land a DVD player for $30us, that can put out a decent image and sound. (Magnavox was the one I had...the mechanics inside of it were physically noisy, but once there was sound, you don't really hear it).
So from there, you have about 220 to go. At this point I would drop $150 on an entry level surround reciever or used surround reciever, and drop $50 on a pair of speakers. The final few bucks can buy basic shielded interconnects and speaker wire (16ga is a good best, no thinner)
That way she has good sound for little buck, but has enough upgradability that she can merely buy a surround speaker set later and enjoy true *quality* surround sound.