I'm sorry to hear you ran into some problems selling over the border, being an experienced Canuck 'phile I have no problems receiving items from the U.S.
Weight limitations is something new to me, I've had 100lb + items shipped to me by Fed Ex and UPS. Maybe it's the physical size of the item that dictates having to go a non-standard route (the infamous Dimensional Weight)?
Payment is easy, I buy a Canada Post Money Order in U.S. Funds and mail it off, the buyer can cash it immediately. Either that or PayPal.
The good old government screws us something terrible when it comes to taxing stuff but it's certainly not 35%. Any product made in North America is considered duty-free under NAFTA rules, sales taxes still apply and usually amount to anywhere between 7% to 15% of the stated value of the item (depends what province you live in). Most of us Canucks object to paying the government tax on a used item bought from an private seller and will do our best to pay little or no tax by asking the seller to state a lower value on the shipment. Generally speaking there is no duties owed on gear unless it's built in Asia; either way the government isn't smart and/or diligent enough to figure out where product is built and apply duties accordingly, stuff just gets processed through and the receiver pays whatever tax he owes.
The only other gotcha is customs brokerage fees paid by the receiver. UPS Ground will charge me upwards of $100 to process the paperwork when the item arrives in Canada, Postal Service charges a flat $5 fee, Fed Ex and UPS Air shipments are processed free (you are already paying a premium for the quick service). Your mileage does vary. In summary, selling to Canada isn't hard at all, just a few very minor twists to take into account. If anyone has any questions or problems doing business with us Canucks please feel free to get in touch at any time. Best, Jeff