My art class did a great job with this project. It was a little tricky (lots of cutting and careful placing) so I don't think I would attempt it with younger kids again. My students are aged 8-13 and the youngest ones needed a lot of help.
I had them use rubber stamps with permanent ink on their blank canvas panels. Then we painted over everything and added effects with bubble wrap and other textures. Stamping before painting caused a cool washed out effect in the background. Then I had them draw and cut out templates from cardstock and use them to trace and cut patterned papers. Mod podge was used to adhere the paper balloons and clouds. We also added real string for the basket ropes. I wish they had been able to add outlines to their balloons but we ran out of time (class runs 1 1/2 hours).
I got the idea for this project from Pinterest.