Canada produces approximately forty feature films annually. But while the country, like many others, has had to deal with Hollywood's dominance of its film industry, Canada's geographical proximity to the United States exacerbates the problem. This fact has been the most defining influence on the development of Canadian cinema. The two countries share the longest undefended border in the world, creating serious problems for many aspects of Canadian culture, including cinema.

Geographically, Canada is larger than the United States but has only one-tenth its population. Over ninety percent of Canadians live within 100 miles of its border with the United States, within easy reach of American radio and television signals, as well as its magazines and newspapers. As a result, advance publicity for American films is readily accessible to Canadian consumers and builds audience expectations, making these movies more attractive than homegrown ones. Canadian filmmakers are unable to compete with either Hollywood's scale of production and its vast, well-oiled publicity machine. Domestically, it is almost impossible for a Canadian film to recoup its costs.

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