The money is not missing.
It can take a week for the money to travel from your bank account to paypal.
Which is why paypal says "pending".
The Seller should see that your money payment is "pending" -- paypal will tell them to wait and not ship until the "pending" status is cleared. The Seller should not be telling you have not paid. They should be saying that they are waiting for your money to arrive.
The Canadian banking system and the American banking system (which PayPal uses) handle money transfers differently. Speed of transfer is not instant. PayPal wants to make sure the money is going to arrive from your bank.
You can add a credit card to your paypal account as backup. Then paypal is willing to trust that the money is going to arrive from your bank (because if it does not, then they have a credit card to go after).
...
Less likely reason:
It is also possible that the Seller did not use the correct email address for the item you bought -- which could be why they not to see the money.
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