How can they? Easy as you have seen. Should they? No. If they do not want to ship internationally, the should not have included other countries in the ships to section.
Since you know they will not ship to Canada do not buy from them.
If you have already made the purchase, leave appropriate feedback indicating they refuse to honor their own terms by not shipping internationally.
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Non payers should get unpaid item strikes and be added to block bidders lists. Period.