I cannot speak to the paypal thing, but my shipping experience living in Canada has been similar to the folks above.
Here are some figures:
With the regular public postal system (so, from the US, that would be sent by USPS), the last time I checked, I believe the anything with a declared value over $20 would charged duty etc, unless it is a gift, in which case it can have up to $60 without being charged most duty/tax. This could have changed since I last checked.
I usually estimate that, when I receive my package, I will have to pay the delivery person about $20 for every $100 of declared value. (That is in addition to whatever shipping and other fees I have already paid.) Sometimes it has been more, sometimes less. For all I know, that percentage could be higher for higher declared values-- I think my orders have never been higher than $150 declared value, so I do not know.
Another figure I seem to remember is that when ordering from the U.S., shipped by USPS, the shipping charges + duties to Canada often result in my total cost being around 1.5 times what it would be if I were shipping to the U.S.
Shipped by UPS etc, for smaller things, the shipping can double the item price! But it looks like your shipping was through USPS.
Hope that helps.