I'm not sure why prior answers have been so indirect and incomplete, as the issue is important to anyone who is commercially selling stamps to buyers in another country. In 2016 the UPU (and thus its member nations) voted to change international postal rules pertaining to merchandise shipments, and after further debate and rule drafting the new rules became effective (at least in the United States) on January 21, 2018. Effective now, US sellers cannot ship "merchandise" via First Class Mail International (that is, a letter). A "parcel" service must be used for "merchandise," and rates for that service start at $8 to $10 regardless of weight or merchandise value. The only material that can be lawfully sent in a first class international letter is "non-dutiable documents". Eventually all UPU member states will have to adopt conforming rules and similar rate increases will be experienced by international sellers who choose to obey the rules. The purpose of the UPU change is to capture revenue for merchandise shipments that otherwise were moving via lower first class letter rates. It is, explicitly, a rule seeking to obtain what member states believe to be fair compensation for a vast new stream of merchandise shipments arising from internet commerce.
It appears to have caught the philatelic community flat-footed, as so few sellers seem to know about it. Unfortunately, casual sellers of low-value "merchandise," such as cheaper stamps, who choose to follow the rules, will be the hardest hit and their buyer community may evaporate. Or, as suggested earlier in this thread, many sellers will choose to ignore the rule and continue to send stamps overseas in a first class letter. They do so at the risk of seizure or imposition of customs duties and penalties. One can reasonably speculate about the level of this risk and the probability of being "caught."
It is important to note that this is not a "policy" of Canada, the US or any other state, although they and other states voted to impose the rule on themselves.
Furthermore, as addressed in another thread on
ebay, the USPS's separate agreements with China place US sellers in a non-competitive position, in comparison with Chinese sellers, in international shipments of small packets or small merchandise.