You are right that the location on a listing is supposed to be the location of the product and not the location of the seller.
There is a Report button on every listing.
However, the seller may not intend to be deceptive. He may not have realized that he was in error.
Before Reporting, contact the seller and explan the problem. Politely. You can catch more flies with honey than with vinegar.
Re: shipping time.
If the Chinese supplier uses Air Mail, there may not be any particular delay in delivery.
If the item is over $20CDN (about $18USD) you may be required to pay duty and sales tax as well as a $10 service charge to Canada Post. Again, something for your message to the seller.
Mark your calendar with Day 30 after purchase. If the item has not arrived by then, contact the seller and ask for a refund. Do NOT agree to a replacement. It will arrive after the 45 day deadline for Paypal disputes, if at all.
You have up to 60 days to leave feedback. Whether you leave positive, neutral or negative fb, it would be acceptable to mention that shipping is actually from overseas, since feedback is meant to let other members know how the transaction went.