Thank you! Now I understand why my friend application was not accepted because of selecting the option "Currently residing in Canada" as Yes. I agree to your point if you select "Yes" then they expect Canada address proof.you can definitely provide US address proof if you live in US. I know someone living in US got SIN mailed to their US address by providing utility bill from US apartment and US Drivers license. So it is working.
but if you denote that you reside in Canada and provide US address proof, then it won't work. the goal of asking address proof is to send a letter with SIN to that address.. just provide living in Canada as no as you are just doing quarantine in Canada and don't 'reside' there.
One follow up question on this:
Do you think saying "No" will be right even though I will be physically present in Canada. In their system I will be in Canada but on form I saying I am not.