I have personally investigated getting a better rate and have talked to 3 separate Canada Post reps.
The level ***is*** 50,000 SMALL PACKET packages. The rationalization given to me is that we are still considered a small business by Canada Post's standards, and that the rates offered on Small Packets are already at very low margin (ahem), so to offer any more of a discount, we'd need to generate huge volumes (ie: Mid to Large business). Amazon would probably qualify, as would Chapters, and maybe those Interwood Direct (mail-order TV) businesses etc. Other than that... who the heck can ship 50,000 packages over the border or overseas a year without selling anything and everything? Ouch.
I did the math. Cheapest small packet: $3.95 x 50,000 = ~$200,000 SPENT at Canada Post each year.
They want you to spend around a quarter of a million dollars per year before they'll even think about giving you a discount -- and I bet it'll be something like 2%.
:P
John