Actually, the code already grabs the first character of the postal code:
$desFSA1stLetter = substr(strtoupper($order->delivery['postcode']), 0, 1);

I just added a simple php is_numberic:
// if 1st letter is a number = US, otherwise Canadian
if( is_numeric( $desFSA1stLetter ) ) {
$request = join('&', array('service=2', ...
} else {
$request = join('&', array('service=1', ...
}