Hah, true, I can't blame you there with your experience. It is a private courier, so it's slightly better than the local postal service. I lived 5 km away from VFS but had my passport couriered back anyway.
Oh, sorry, I don't think I answered your previous question about money directly. I'd meant to suggest that CBSA usually doesn't ask about funds on hand for the trip, but in the off chance if he is asked, he can simply tell the truth about the $500 pocket money and you supporting him. It shouldn't be an issue. Money is only really declared if it's over $10,000.