Although adjacent to the US, Canada was for many years treated in American cinema as an exotic place, a mythical landscape vaguely referred to as "the Northwoods" or "God's Country"—the latter phrase popularized in the novels of the phenomenally popular American writer James Oliver Curwood (1878–1927)—as if it were a mere extension of American wilderness. In more recent, runaway productions, Canada has been represented as nondescript; American producers have taken advantage of the favorable rate of exchange and lower labor rates to film in Canada while making Canadian locations look vaguely American. For example, The Dead Zone (1983), a thriller by David Cronenberg (b. 1943), based on the novel by Stephen King, was shot in Niagara-on-the-Lake and other places in Ontario, while set in Maine. Rumble in the Bronx (1996), a US-Hong Kong co-production with Jackie Chan, although ostensibly set in New York City, makes no attempt to hide the mountains of British Columbia, plainly visible outside Vancouver. Its indifference to Canada seems like an unintentional expression of many Americans' attitude toward Canada.

Canadian cinema has also suffered from the fact that so much Canadian talent leaves home for the greater allure of Hollywood and the larger American market. The long list of actors who became American movie stars includes Dan Ackroyd, Geneviève Bujold, Raymond Burr, John Candy, Jim Carrey, Yvonne De Carlo, Deanna Durbin, Chief Dan George, Glenn Ford, Michael J. Fox, Walter Huston, John Ireland, Margot Kidder, Raymond Massey, Mike Myers, Leslie Nielsen, Christopher Plummer, William Shatner, Norma Shearer, Jay Silverheels (the Lone Ranger's faithful Indian companion in the US's long-running TV western), Donald Sutherland, and Fay Wray (the screaming heroine of King Kong [1933]). The Toronto-born Mary Pickford (1892–1979), one of Hollywood's first stars in the silent era and one of the founders of United Artists (along with Charles Chaplin, Douglas Fairbanks, and D. W. Griffith), was known, ironically, as "America's Sweetheart" because of her roles in such films as Rebecca of Sunnybrook Farm (1917) and Pollyanna (1920).

Among the directors who have left Canada for Hollywood are Edward Dmytryk, whose credits include the classic films noir Cornered (1945), Murder, My Sweet (1944), and Crossfire (1947); Hollywood stalwart Allan Dwan, who directed everything from Heidi (1937) to Sands of Iwo Jima (1949); Arthur Hiller ( The Out-of-Towners [1970] and Silver Streak [1976]); Ted Kotcheff ( The Apprenticeship of Duddy Kravitz [1974] and First Blood [1982]); Del Lord, the forgotten director of many Three Stooges shorts; Ivan Reitman ( Meatballs [1979] and Ghostbusters [1984]); and Mack Sennett, the driving force behind the slapstick comedies of the Keystone Studio. In contrast, Norman Jewison (b. 1926), director of numerous Hollywood hits and Oscar ® -winning films, including In the Heat of the Night (1967) and Fiddler on the Roof (1971), returned to Canada to establish the Canadian Film Center, a production facility for developing Canadian film talent, is a singular exception.

The largest film exhibition chain in Canada today, Cineplex-Odeon and Famous Players, are controlled by American interests and show mostly mainstream American movies. Canadian films, which rarely feature major American stars, seldom find their way onto Canadian cinema screens outside the few big cities (Montreal, Toronto, Vancouver), and in the rare instances when they do, they receive little publicity since Canadian distributors cannot hope to compete with the saturated publicity of the American studios. In 2002, a rare attempt at a major national publicity campaign and release strategy was devoted to the Canadian romantic comedy Men with Brooms , a film about curling (still the most popular sport in Canada, exceeding even hockey) which, although only moderately successful, may be the beginning of a new phrase for the Canadian film industry, since the film performed well at the box-office domestically.

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