Yes, that is correct. Most sellers who refund like this deduct the additional fees paid to eBay and PayPal from the amount of the refund. Most of the posts on the discussion boards, though, are about partial refunds when combining multiple purchases into one shipment - something you may not be able to calculate until after the sale and payment.
I looked at a few of your current and recently sold listings. You have very nice items. But I don't see why you cannot have quite accurate calculated shipping costs showing in all your listings. And I think that with a shipping cost, your items will receive more views, thus more chance of sales. To say nothing of less work for yourself.
Do you have a scale? You can buy an inexpensive flat scale at Canadian Tire. Pack your item in a box with the packaging materials, don't close, but measure and weigh it in metric, enter this information in the SYI form, and correctly choose three shipping options - Canada, USA and then International. Check your listings to make sure these options are showing correctly. The listings I looked at were not set up correctly to display shipping, some showed Canada and US, one showed no countries, none showed a price for other countries. In the body of your listings you state that your shipping costs are not correct. If I were a buyer from say, Europe, I would find this off-putting. To say nothing of the surprise at the high cost of shipping from Canada when they inquire, or even worse buy without knowing.
I'm not clear about your reference to being able to get a discount via Canada Post. If you are printing your labels from PayPal - and I suggest this - you receive very good discounts on Tracked Packet (14%), Expedited (18% for Canada & US) and I think 5% on Expresspost. When shoppers see your listing with calculated shipping, the cost they see is with the discount calculated. No need for you to refigure everything and refund. If you are using the Canada Post with a Venture One card, I think the best discount is only 5%.
Even if you are making your boxes there are only a few price breaks by size, unless you are shipping large light items, which then are priced by volumetric weight. Take this into account when you initially test pack your items. Information about minimum and maximum sizes for each shipping service and volumetric calculations can be found on the Canada Post website. For example, Exxpedited within Canada has a minimum size of 10x7x1cm, to the USA minimum is 21 x14 x .5cm. Most sellers who have variable sized shipments check the Canada Post site with their weights & dimensions to get a sense of shipping costs to various destinations.
