In order to turn on Letter Grades in your Canvas Gradebook please follow the steps below.
A Grading Scheme is required in your Canvas course in order to Sync Grades from Canvas to Peoplesoft.
Navigate to Settings
Select the Course Details Tab
Scroll down and find the Grading Scheme checkbox
Click Enable course grading scheme to turn on Letter Grades in Canvas.
Once you Enable course grading scheme  click view grading scheme  to select a school, UG, or Graduate course-specific grading scale.
To change the course grading scheme select View grading scheme  and then Select Another Scheme.
Select the appropriate scale according to your discipline or level of study.
Please make sure to click Update Course Details at the bottom.