Or would the sale be considered to have already happened 3.5 years ago, the owner-financing be considered a loan, and only the interest on the loaned-out money be taxable?

I recently attended a webinar, Master your Rentals: Save Money and Time with effective Self-management.  

Don't take out a HELOC Jason, it's not worth the time it takes for the amount of money you need.

I’ve read Kiyosaki’s books, too, and they completely shifted the way I think about money and investing—such a game changer.

The time value of money still favors acceleration, but only if you have a clear path to eventually utilizing these losses.Don't let your tax savings get trapped in passive activity loss limbo.

The problem with that is no money left for their new home.  

I have been investing for years; stocks, options, bitcoin, real estate, and private lending and now I am getting out of all of it because my job is proving to have an infinitely higher return on time and it no longer makes financial sense to dump money into rentals. 

Most Canadians investing countryside seem to be moving their money into properties in MB, SK, or AB due to affordability and in AB's case the more landlord friendly laws.

Double coverage seems like a waste of money to me and a possible finger pointing fiasco if a claim happens.

This will cost you a lot of money and time.