if somebody shorts the stock (sells) but doesn't deliver it to the buyer before the 3 day maximum period (the clearing time), the seller's (shorter's) broker will instruct TSX of a pending failure and arrange to buy it at a cash premium instead.
the premium is usually over 10% to market price, obtained from some other willing seller (or from a broker's own inventory) in order to deliver it to the original buyer and settle the original transaction.
the broker charges the original seller (shorter) those delivery costs, and hopefully also a hefty fee to compensate for its extra effort for doing so, in addition to the premium over market for immediate delivery to the buyer for settlement.
times, procedures, etc. at the link below.
hth,
R.
ref.