The first thing you have to know about the Canadian film industry is that there are, in fact, TWO Canadian film industries.
There is the English Canadian movie business, and there is the French language film industry based in Quebec.
I'll start with the English Canadian cinema first, because it is defined first and foremost by a culture of missed opportunities.
Anglophone cinema in Canada goes back to the turn of the 20th century, but has always dwelt under the shadow of the American Hollywood behemoth. Traditionally Canada has about 1/10 of the population of the USA spread over a wider area, and thus should have an industry about 10% of the size of Hollywood.
Make it about 1/10 of 10% and you might have a more accurate, if not overly optimistic, picture.
Filmmaking in Canada was sporadic at best up until the late 1920s and early 1930s. The UK passed the Cinematograph Films Act of 1927 which decreed that a certain percentage of films shown in Britain and the British Empire had to be filmed in Britain and/or the Empire and use predominantly Imperial casts and crews. American distributors, eager to get their films in the British market, started making films not only in Britain, but in Canada.
These films were nicknamed "Quota Quickies," and were for the most part ultra-low budget, quickly made little movies that were mostly forgotten by all but the most hard-core film historians.
Once Britain's restrictions on foreign films were rewritten the quota quickie market pretty much collapsed. Sadly, the filmmakers in Canada were unable to convince their American investors that it was worth their while to continue letting them make films without British trade regs to prop them up.
In Canada this left the fledgling National Film Board of Canada as the predominant source of domestic anglophone cinema. But the NFB's main purpose was making documentaries, educational films, and wartime propaganda. Narrative cinema, not so much.
During this time Canadian entertainers and filmmakers would cross the border to the USA and Hollywood, as soon as they possible could and not look back.
Canadian films would pop up more and more through the 1940s-1960s, but were more of a curiosity than an industry. Among the few that were made, usually had an American actor in the lead in the hope that it would make them more commercially viable.
Usually it didn't.
Then came the tax shelters.
In the 1970s the Canadian government tried to spur a domestic film industry by creating a complex tax shelter scheme for people investing in film production.
Suddenly EVERYBODY with cash to spare was putting money into Canadian film production. Movies were getting made all over the place and Canada was being hailed as "Hollywood North."
Now you may notice how I'm saying "production" in relation to this tax shelter, because distribution wasn't included. It was actually better if the film lost money because then the investors could deduct even more from their taxes.
Not all movies disappeared into oblivion and occasional runs on Canadian late night local TV. A select few, like Daryl Duke's heist thriller The Silent Partner, and David Cronenberg's sci-fi horror extravaganza Scanners enjoyed both commercial and critical success.
But most were forgotten.
When the tax shelters were repealed the industry more or less collapsed. The elite few filmmakers who stood out from the herd either moved their operations to Hollywood, or remained in Canada, but getting most of their financial backing and distribution from American producers and studios.
One survivor though would come to embody the potential and the disappointment of English Canadian film industry, Alliance Films.
Alliance Films was started by an upstart Hungarian immigrant turned proud Canadian culture factory named Robert Lantos. It's original model was to get all the independent producers and distributors in Canada to work together to carve a niche for themselves.
Now the government had set up some film funding bodies, that eventually merged to form Telefilm Canada, but that wasn't enough to maintain a company like Alliance.
Alliance needed regular income, the sort of income they could only get from distributing American independent movies (mostly from New Line & Miramax) in Canada, and from producing and selling television shows.
Meanwhile the feature films coming out of Canada began to change. The kitchen sink dramas, nostalgia pieces, and mini-Hollywood type thrillers, comedies and horror films began to fade from prominence. In the 80s and 90s they tried hard to break free from the constraints of trying to imitate Hollywood. Dark psychological dramas, dwelling on taboo subjects became trendy, and presented in very tedious and pretentious ways became the norm.
You see because of the government funding the films were not being made to please a market, but the bureaucrats who ran the film funding agencies. The bureaucrats who ran the film funding agencies were interested in what made them look important, creative, and daring at the high brow Toronto Film Festival parties. The entire filmmaking scene became a more and more closed off clique of people who are very important within their own magic circle.
The audience didn't matter, and the audience came to distrust Canadian films and Canadian filmmakers. Actor, writer, director Paul Gross, Canada's answer to John Hamm, is one of the few who consistently try to create commercially viable and widely appealing movies for the English Canadian audience, and even he can't make back the production budget until the film's run on TV so many times the tape's worn out.
The usual life cycle of a Canadian movie is development, production, appearance at a couple of film festivals, a run on a handful of screens in the big three cities, and then oblivion.
Alliance however grew, thanks to distributing hits like The Lord of Rings trilogy in Canada and from the mega-success of the CSI franchise which gave them an unprecedented level of power and prestige in the international TV market.
So what did Alliance do?
Did they use this new clout to sell more Canadian productions all over the world?
Robert Lantos had long retired from the CEO post, and gone back to producing, and the new people running Alliance decided that growth and power wasn't for them.
Alliance sold off all their assets, including CSI, then the consortium that bought those assets sold off most of what they had to get out of debt. Now all that's left is a much smaller film distributor that's in line to be purchased by international entertainment company E-One, who might actually do something with it.
They missed every opportunity they had.
But it's all not depression and angst.
Meanwhile in Quebec, the French language film industry thrived. They were buffered in part by sharing a language with their audience that Hollywood didn't share, but mostly because they value two things: efficiency, and the audience.
Those two factors have kept the francophone film industry alive through several boom and bust cycles, and both English Canada and Hollywood could learn from it.
Efficiency - Quebecois films are developed and shot very quickly and efficiently in comparison with English Canada and Hollywood. They work with small, highly skilled crews, and very little waste at any stage of a film's production.
The Audience - Quebec filmmakers actually seem to like the audience and appear to value their enjoyment of movies. This creates something magical between filmmakers and the audience that Canada's anglophone cinema doesn't have: TRUST.
The filmmakers actively seek to entertain the audience, and the audience trusts these filmmakers. This trust extends to when the filmmakers handle controversial subject matter like sex, religion, and politics.
It's created a market where Quebecois films actually make profits domestically. Something that's unheard of in the rest of Canada, and increasingly harder to do in Hollywood thanks to its shaky business model.
And those are the basics of the Canadian film industry.