Consider using fine orchid bark, or a mixture of bark and perlite, to repot. I'm not familiar with what is available in Canada, and hope some Canadian members respond with suggestions.
When you have your things together, get it wet to make the sphagnum moss more flexible, take it out of that pot and gently remove whatever sphagnum comes off very easily. Don't risk damaging roots by trying to pick off every strand.
That pot will probably be OK for the plant. Pot it with the base of the best-looking growth just below the surface of the new potting medium. The base is where the roots come from. Put the old leafless pseudobulbs (the wrinkled stems) against one edge of the pot, with the newest growth facing the center of the pot. Roots may prevent you from getting them right against the edge; don't worry about that.
Water well once repotted. I would probably put it in a bowl and soak it for a few hours, but don't let the bark float out of the pot.
Keep it evenly moist and brightly lit, but with no direct sun. Your plant may not have been watered often enough, which is why it looks so dried out. Or, as Ray suggested, if the moss was kept too wet the roots may have suffocated and died. In either case not enough water made it to the stems and leaves. The stems should be smooth and shiny, not deeply ridged.
Most of the time it's best to repot when you just see new white roots with green tips forming at the base of the newest growth. But in your situation the old roots may be in such bad shape from old sphagnum I think you should repot now.
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