Unfortunately, with the current copyright laws in Canada (as of this writing), the full-res images are part of the package, whether you like it or not, since your customers hold copyright in the images. That's not likely to change without a lot of political wrangling (we came so-o-o close to getting a bill before Parliament to enact changes a couple of sessions ago, but the session was prorogued before the bill was introduced -- back to the lobbying). You might want to help that cause along by becoming associates (and, perhaps, eventually, full members) of either CAPIC or PPoC (through PPoC-Ontario, since you're in Cochrane). Not wanting to get overtly political, but the fact that you don't own your work unless you're just doing it for the lulz is manifestly unfair.

You are going to have to differentiate on quality. The customer may own the work, but they don't have the know-how to prepare it for print, how to select the best medium/printer for the job, how to artfully put together albums and so forth. And for the sake of anything you hold sacred, get a real lawyer to help you draft a contract that can salvage a workable business model from the work. I think you'll find that any substantive alterations you do to the original work (remember, the customer owns that) to add value with the customer's permission and knowledge becomes a derivative work in which you do hold copyright. PPoC has great resources and a great community (and pretty darned good legal counsel); use their knowledge base to come up with a plan -- I don't know how the digital world has affected editing/retouching and so on (I haven't worked as a pro for quite a long time). If the original files are meh and the colour-corrected, contrast-enhanced, sharpened, etc., version knocks their eyes out, then they have to go to you for the value-added stuff.