The Canadian Tax-Shelter Horror Canon

In 1974 the Canadian government raised the Capital Cost Allowance on certified Canadian films to a 100% write-off. An investor could put money into a film and deduct the entire amount against income. The policy was meant to build a national cinema; what it built, for about eight years, was a horror industry — because horror was the genre where a small budget could still find an international buyer, and because nobody investing for the deduction cared much what the film was.

The results are stranger than the cynical reading suggests. A tax shelter is indifferent to content, and indifference is a kind of freedom. Between 1974 and 1982 Canada produced a body-horror auteur, the film that fixed the slasher’s calendar-holiday formula, the best séance ever staged, and an entire industry of Ontario towns pretending to be Ohio. The cycle collapsed in 1982 when the allowance was cut to 50%, and the country’s genre output fell off a cliff within two years.

These ten are chronological. I have kept to films made inside the shelter years and left out the obvious international outliers. If you want the wider argument about what this period did to the body-horror tradition, the body-horror lineage traces the line forward.

Before the money arrived

Deathdream (1974). Bob Clark’s Vietnam-returnee film — released as Dead of Night in some territories — was shot in Florida with Canadian money and a Canadian production company, and it sits at the head of this canon by attitude if not by strict geography. A soldier reported killed comes home, sits in an armchair, and slowly stops being able to pass for alive. Clark and writer Alan Ormsby run The Monkey’s Paw through a suburban living room, and the film’s genuine subject is a family’s willingness to not-notice. Richard Backus plays the son with a dead-eyed politeness that curdles the whole picture. Tom Savini’s first significant makeup work is here. I have written about it in Deathdream: The Vietnam Zombie Homecoming.

Black Christmas (1974). Clark again, this time in Toronto with Canadian Film Development Corporation backing, four years before Halloween and carrying most of the parts. A sorority house, obscene phone calls, a killer already in the attic, a police procedural that never catches up, and an ending that refuses to explain itself. The killer’s point-of-view camera, the seasonal hook and the disbelieving authorities all arrive fully formed. Olivia Hussey, Margot Kidder and John Saxon give it a weight the genre would spend a decade failing to match. Full appreciation in Black Christmas 1974: The Slasher Before the Slasher.

The Cronenberg engine

Shivers (1975). David Cronenberg’s first commercial feature cost around $180,000 of public money and became the first CFDC-backed film to return a profit, which did not stop Robert Fulford writing a Saturday Night piece attacking it as a national embarrassment paid for by the taxpayer. The film is a parasite outbreak in a Montreal high-rise, engineered by a doctor who decided that reason had cost humanity too much, and it ends with the infected driving calmly out into the city. Cronenberg shoots a modernist apartment block as a closed system and lets the plumbing carry the plague. See Shivers: Cronenberg’s Apartment-Block Contagion.

Rabid (1977). Cronenberg’s follow-up hands the outbreak to one carrier — Marilyn Chambers, cast against her adult-film fame, with a stinger under her arm and no idea what she is doing. The film is a Montreal procedural about quarantine that keeps widening: shopping malls, the Métro, soldiers with body bags. Chambers is genuinely good, and the film’s sympathy for the vector rather than the victims is what separates it from every plague picture that followed. Detailed in Rabid: Cronenberg, Rose and the Armpit Stinger.

The Brood (1979). The best film of Cronenberg’s shelter years and the most personal thing he has made. Oliver Reed runs an institute where patients express psychological damage as physical growths; Samantha Eggar is the patient whose rage manifests as small deformed children who murder on her behalf. Cronenberg wrote it during his own custody battle, and the picture’s fury at a family being taken apart is unmistakable. Reed underplays magnificently. The Toronto winter does the rest. Covered in The Brood: Cronenberg’s Divorce Made Flesh.

Scanners (1981) belongs to this period too, and its exploding head paid for the rest of the decade; my career piece on Cronenberg follows the whole arc through to Videodrome, which was shot in 1981 under the same rules and released as the shelter closed.

The wilderness and the séance

Death Weekend (1976). William Fruet’s home-invasion film — produced by Ivan Reitman, of all people — puts Brenda Vaccaro in a lakeside house with a gang led by Don Stroud and then declines to let her be rescued. It is mean and competent and very Ontario: the isolation is real, the cottage country is beautiful, and the film’s interest in Vaccaro’s methodical turn from victim to hunter is more attentive than the marketing allowed. Fruet was a serious writer before he directed, and the dialogue shows it.

Rituals (1977). Peter Carter’s wilderness film sends five doctors into northern Ontario on a canoe trip and starts taking their boots. Hal Holbrook anchors it, and the picture’s argument — that professional men who have spent careers making life-and-death judgements are useless the moment the environment stops deferring to them — is sharper than the Deliverance comparison it always attracts. Carter shoots the bush as indifferent rather than malevolent, which is far worse. It circulated for years in dreadful prints; the restoration is a revelation.

The Changeling (1980). Peter Medak’s Vancouver-shot ghost story won the first Genie for Best Picture, and it deserved it. George C. Scott is a composer who loses his family and moves into a mansion with a locked attic, a child’s wheelchair and a music box. The séance sequence — a medium’s automatic writing, the tape recorder played back — is the finest ever put on film, because Medak stages it as a slow gathering of evidence and lets the audio do the frightening. The film’s restraint is the technique: doors, a ball on a staircase, a bath. See The Changeling: The Ghost Story With the Best Séance in Film.

The slasher production line

Prom Night (1980). Paul Lynch’s film hired Jamie Lee Curtis on the strength of Halloween, gave her a disco sequence, and built the template for the holiday-titled slasher that Canada would then export by the dozen. The mystery is thin and the picture knows it; what it has is a genuinely good sense of a school as a social machine, and Leslie Nielsen playing the principal entirely straight. Prom Night 1980: The Disco Slasher goes further. Curtis made Terror Train the same year, on a chartered train through Quebec.

My Bloody Valentine (1981). George Mihalka shot in Sydney Mines, Nova Scotia, and took his cast down a working mine, which is why this one still plays. The pickaxe killer in breathing apparatus is a good monster; the mining town is a real place with a real economy; and the film’s understanding that a company town’s memory is its own curse gives it a spine the American imitations lacked. The MPAA cut it to ribbons in 1981 and the footage was restored in 2009. Read My Bloody Valentine 1981: The Canadian Mining Town Slasher.

Happy Birthday to Me (1981). J. Lee Thompson — the man who directed The Guns of Navarone — took the shelter money and made the most demented slasher of the cycle. Melissa Sue Anderson is a schoolgirl with memory gaps, Glenn Ford is her psychiatrist, and the plot involves brain surgery, a shish-kebab, and a final twist so baroque that describing it sounds like a joke. Thompson directs it with total conviction, which is exactly why it works. Covered in Happy Birthday to Me: The Most Bizarre Slasher Twist.

Why the disguise shows

Here is the mechanic that defines the cycle. To certify as Canadian, a film needed points — Canadian director, Canadian cast, Canadian crew. To sell internationally, it needed to look American. So the films hire one imported star, put a Canadian ensemble around them, and shoot Ontario as somewhere generic: no flags, no accents leaning too hard, no currency in frame.

The disguise slips constantly, and the slippage is the aesthetic. Cottage-country bush, prairie flatness, mining towns with company housing, Toronto’s brutalist blocks standing in for nowhere — these places keep asserting themselves through the anonymity. My Bloody Valentine is set in a town the film calls Valentine Bluffs and photographs as Sydney Mines. The Brood is winter Ontario with the label peeled off. That tension between a landscape and a passport is why these films feel slightly wrong in a productive way, and why the cycle produced so much genuine unease from so much cynical financing.

The casting rule has a second effect worth noticing. An imported lead surrounded by unfamiliar faces makes the ensemble read as strangers, and horror runs on strangers. When Glenn Ford is the only face you recognise in Happy Birthday to Me, every other character becomes a suspect by default — the film gets a mystery structure free, courtesy of a points system. American slashers of the same years had to work for that anonymity by casting unknowns on purpose. Canada’s regulations handed it over as a condition of funding, and the better directors noticed and used it.

Where to start, and where to watch

Take Black Christmas, The Brood and The Changeling as the three-film case for the period: one invents a genre, one is an artist using the loophole for confession, one is simply a great ghost story. Then work outward through the slashers, which reward the archaeology. Synapse, Arrow and Scream Factory have restored most of the essentials, and the Canadian titles have benefited enormously — these were carefully photographed films that spent thirty years in muddy transfers.

The cycle’s obituary is short. The allowance dropped to 50% in 1982, the money left, and the country’s genre output collapsed until the late 1990s. Eight years of accidental patronage bought a national horror tradition, and nobody involved in writing the tax code ever intended a single frame of it.