My friend bought QX70 and it is running stock 265/45-21 tires.
Looking for winter/snow tires, but prices are pretty high.
We found for sale almost new 265/40-21 front and 295/35-21 for a rear. Do you guys think there will be issue with traction control?

 

Those sizes are less than 1% diameter variance front to back which is good, and just a bit over 1% from OEM tire diameter which shouldn't cause any problems diameter-wise but that 295 might be a bit wide for fender or inner clearance or recommended wheel width.

 

SO size difference 265//45-21 vs 265/40-21 which is -3.6% smaller compared to OEM, shouldn't be an issues?

 

Must've been the beer
That difference from OEM may cause problems but it's in that gray area where there's not a hard line there. FWIW, if you are wanting a winter set a narrower tire would be preferred, like 245 width, the 295s really aren't great for snow plowing.
Sorry for the error.