OK, so your great-grandfather became a British subject in 1933. Actually, he would have lost his Italian citizenship at that time, but if he didn't tell Italy, I guess they wouldn't have known. As I mentioned, if he was still in Canada in 1947, he would have become a Canadian citizen at that time. Apparently, though, he was back in Italy in 1940, because you say your grandmother was born there. As the child of a British subject, your grandmother was likely a British subject, but, as a woman, she couldn't pass that status on to her children.