I had this happen with a merchant a week or so ago: despite having funds in the correct currency in my account, the option to use those funds (usually not the default action but selectable) was nowhere to be found. I was forced to use a credit card.

PayPal needs to decide if they're going to be a bank or a simple credit card processor, because allowing one half of the company to pretend the other half doesn't exist leaves a particularly bad taste.

Never mind how hard it is already to get US$ out of them as a Canadian, since they needlessly blacklist US funds accounts held by non-Americans in order to force you into using their poor currency exchange rates (so they can squeeze another couple percent out of you).