Mike,
It isn't at all "Grey" UPDATING to a newer engine in the same model vehicle is even legal in california, the only reason Cali makes you go to an emmissions referee is so he can VERIFY that you did it right.
In most of the rest of the country many 2.9 Receipient vehicles are old enough to be exempt from the visual inspection.
In the area where I live they don't even DO "visuals", hell where I live they don't do a "sniff" test either. it's kinda annoying because my truck will actually pass the 1994 emmissions standards, but nobody even tests....I go through all the effort to make my truck "legal" and nobody CARES.... Oh well...
The rules in Canada are likely different and he should check into it, but what year makes the best swap is variable on what year the receipient is.
If he has an '89-92 an engine from an explorer, '91-94 is probably best, there are SOME differences in wiring, if OTOH he's doing it to an '86-88 Ranger the job is considerably more complicated.
In ANY vehicle there are profound issues working with a '96 or later engine, this mostly due to the '96-up being EEC5 (some '95's are EEC5)
AD