The problem is that you paid through Paypal from your bank account.
In effect you wrote a cheque. Now the cheque has to go through both the Canadian banking system and the American banking system, because PP is an American company, before it 'clears'.
Only then can your seller print your shipping label.
I would suggest that the process is both faster and safer if you instead back your PP account with a credit card. Not only are your payments then truly instant, but you have a second level of Buyer Protection through your card's chargeback program.
It can take up to 10 calendar days for an 'e-cheque' to clear. Your bank has cleared the payment, so they are telling you the truth. But the payment has not yet been deposited with Paypal. So they are also telling the truth.
Your seller cannot print a PP shipping label until PP has the cleared payment.
When the payment clears, your purchase will automatically be marked paid. The seller doesn't have to do anything then but ship.