Do you back your PP account with your bank balance or with a credit card?
If the former, it will take upwards of 10 days for the payment to clear the Canadian and US banking systems (PP is a US company.)
It sounds as if your seller accepts that you have paid. It is unusual that uncleared payments are open to Unpaid Item Disputes, but as long as he does nothing, the UID will eventually close itself.
He can mark the item Paid manually and ship.
He cannot print a PP shipping label (which has discounted postage among other advantages to the seller) until your payment has cleared.