They are supposed to and infractions can be Reported. There is a Report button on every listing.
The purpose is partly to make it clear when duty on an import will have to be paid. Even a country rather than a city or province is acceptable.
If you purchased from a Canadian seller, but your item was shipped from China, you should first contact the seller and explain the problem. If she is unwilling to help, then you can start an Item Not As Described dispute with eBay. To get a refund on the item, you will need to return it with Confirmation of Delivery to the seller (not the overseas shipper the Canadian seller).
If you return the item to another country, you can claim back the duty and sales tax by proving the return to CBSA. If you return it to the Canadian seller, you still pay the taxes. (I think, but it does seem unfair.)
In addition, you can leave feedback and Detailed Seller Ratings that reflect your experience. The most effective feedback is calm and factual. "Ships from China, had to pay duty, delivery slow" for example.
