Tough to say for sure, and I can't recall the CCA rate for this, but would it not be 4% DBB? In which case, I mean I don't know what the ACB of the property is, but let's say it's $500,000, then your CCA is $20,000 the first year, which on a $500k property isn't a ton of rent (1650/mo or thereabouts). So if he's actually creating a rental loss for the year, it's not by much. I assumed that the CCA was simply wiping out this source of income more or less, which combined with other stuff on his return is what's generating the increased refund. All speculation of course.
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