Really? I checked the USPS website and seeems like you can insure packages sent to Canada. http://www.usps.com/international/sendpackages.htm
I used to work in a PO (in Canada) and we could insure all packages sent to the US, so that just seemed odd to me! Good luck.
I think I just had a really stupid postal worker yesterday. I came home and looked it up on the USPS website and there shouldn't be a problem! I'm going back again today, Gailey. It will work!!