Hi Kim, please take this suggestion back to the office and see what you can do. I am not the only seller who thinks that Canada Post rates within Canada are much higher than shipping to the US. I understand that US Rates from Canada are based on delivery to the border only, then USPS handles the rest.
I have just returned from living in Australia and being an Ebay Seller there too. The Australians have it made!! For small parcels, they have Post Satchels that are flat rates for delivery nationally. i.e. up to 500g and fitting in the given satchel, the rate is $4.75Aus. Up to 3 kg and fitting in a larger satchel, the rate is $8.40Aus whether it's shipped to your neighbour, to the outback or Tazmania. (see http://www.auspost.com.au/BCP/0,1080,CH2096%257EMO19,00.html for more detail...)
Canada Post needs to do more to ensure than Canada is as competitive as the US in the Web/Mail Order department. Anything you can do to help is appreciated!
Thank you!