Ollieg,   I don't see how her grandfather's story, whether or not he worked for the Nazis is relevant to Canadians, but it is a potential distraction.   Denying or confirming the story, would just give it legs.  She did not work for the Nazis and her grandfather's history, whether sullied or clean, rests with her grandfather, and  does not affect her ability as a cabinet minister.  

If her grandfather was a Nazi, what would you propose we do with Ms. Freeland?  Deportation, Jail, assign foreign affairs to another politician, evict her from the Liberal party?  If you can even think any of the above are reasonable, then consider what we would do with other Canadians who are citizens, & who had an ancestor[s] who were/ may have been a Nazi party member or supporter or in their armed forces