The law actually says "direct and immediate supervision". This may be commonly extrapolated to mean "arms length", but the actual wording is direct and immediate supervision. Like most of our laws, open to interpretation. Also, simply being "arms length" from someone doesn't in and of itself mean you're properly supervising. If you're not paying attention to the person, but simply "within arms length", you not really supervising.
And no, there is no requirement that the owner of the gun be the one who is supervising. As long as the one supervising has a valid license for that particular firearm, it doesn't matter if they are the owner or not. At the local shooting range, a dad was supervising his son shooting a handgun. The dad had to go to the washroom or something, and asked if I'd watch his son shoot. I wasn't shooting at the time, so I was more than willing to 'supervise'. It didn't matter that the gun owner wasn't present. I have my R-PAL, and the firearms was a restricted, so everything is good.
I have also seen minor's shooting ipsc. I guess the RO running the stage is considered in 'direct and immediate' supervision?