It sounds as if the seller wants to send you his own shipping label. But he doesn't need you to cancel your 'request for refund' to do that.
Is there an open case in the Resolution Centre? Is eBay or Paypal already involved? If so, DO NOT CANCEL YOUR REQUEST.
If, in fact, he wants to pay for the return (not Standard Practice, but some sellers do this as a courtesy when the error was the seller's), he does not need you to cancel.
If you did cancel, you would not be able to re-open the Dispute.
Tell him thanks but his (foreign?) label would not be accepted by Canada Post and you will pay upfront and let him know the cost. Give him the courtesy of an approximation of the cost and include a link to the appropriate page on canadapost.ca. (He may just be confused. Maybe.)
Here's the normal sequence in an amicable refund.
Buyer asks for refund.
Seller agrees and asks for return.
Buyer returns with Confirmation of Delivery (tracking).
Seller refunds on arrival.
And sometimes, the seller will send a separate refund of the return postage through Paypal's Send Money option. He can't add this to the basic refund since all that can be refunded is the amount originally paid.
In a slightly less amicable sequence.
Buyer asks for refund.
Seller refuses or ignores request.
Buyer opens a Dispute.
Buyer is instructed to return the purchase, on her own dime and with Confirmation of Delivery, to the seller.
Paypal sees that the item has been received back by the seller.
The seller is not required to refund until he has the item back.
If the seller does not refund himself at that point, PP will refund the buyer and go after the seller for their money. There's other fallout for the non-refunding seller, but let's not go into that.
The buyer gets a refund of her original payment, but not of the return shipping.
Do NOT cancel the Dispute.
And be sure to use a Confirmed Delivery/tracked service. This is absolutely necessary, even if the seller were not a little sketchey.
