As one speaking from the development side, you really should avoid allowing the developer to 'develop' against live student data. The options are to have a second 'staging' site that hosts canvas as a testing area (this is site from which you'd assign the developer key). Another option is to have the developer install their own version of canvas where they could do their testing and conduct demonstrations to show you their progress.
Your complication is in the 'toggling' between platforms - as this toggling may, by design, open student access to the alternate LMS may require the 'second' LMS to get student data by design.
So while complicated (and not easy), I strongly suggest that early-stage development and testing be outside of your production student data, and that some type of specification be provided by the vendor which fully describes (to the point where you have a comfortable understanding) of what specific data will be accessed, and what the access rights are (who gets to see the data).
Good luck!