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Canada’s classic horror movies were mostly tax dodges

Canada produced a whole lot of gloriously schlocky grindhouse fare in the ’70s, and one strange tax loophole made it possible

Still from “Black Christmas”

Still from “Black Christmas”

Canada’s film industry has always laboured in the shadow of Hollywood. Our American neighbours pump out more cultural products and have a bigger audience to support more lavish productions. But in the 1970s there was a brief period—enabled by friendly tax laws—that unintentionally produced a boom in Canadian horror movies.

In 1974, there were just three feature films produced in Canada. In 1979, there were 77. That increase was due to a tax loophole called the Capital Cost Allowance, which let investors take tax deductions for their investment in Canadian-produced movies. In 1974, that deduction limit was raised to 100%, creating an irresistible tax shelter, and a consequent rise in the number and size of Canadian-made productions. But many of them were of dubious quality, and others were made purely as tax dodges, with the final products never truly meant to be seen by the public. The Capital Cost Allowance was slashed to 50% in 1982, which ended the tax advantage of funding a low-grade Canadian slasher flick and marked the end of the era.

There are hundreds of such “Canuxploitation” films, and you really should visit Canuxploitation to read about more of them—it’s certainly the definitive guide to the films of what came to be known as The Tax Shelter Era (and far beyond).

Here are a few of the Canadian horror classics that were spawned by the Capital Cost Allowance:

Cannibal Girls (1973)

Eleven years before 1984’s Ghostbusters, then-unknown Ivan Reitman made this gleefully sleazy—though not particularly coherent—horror romp with a $12,000 budget, featuring pre-SCTV actors Eugene Levy and Andrea Martin in their first starring roles. While it predates the Tax Shelter era, it’s in many ways a model example for the Canadian grindhouse horror films that followed, from the lurid premise to the unapologetically commercial intent. In an ingenious stroke of marketing, the movie advertised that a bell would ring during screenings to warn squeamish viewers to shield their eyes against “scenes of an especially erotic or gruesome nature.”

Black Christmas (1974)

Though it’s not exactly a slasher flick—it’s heavy on suspense but not especially gory—Black Christmas is a landmark horror movie, cementing many of the touches that became classic tropes of the bigger-budget teen slashers of the ’80s. Director Bob Clark was American, but it was made in Toronto by a Canadian production company, Quadrant Films, which became the country’s biggest independent film producer in the ’70s, and was largely made possible by the 1967 founding of the Canadian Film Development Corporation—the predecessor to today’s Telefilm Canada.

Shivers (1975)

The first feature film from the now-acclaimed “master of body horror” David Cronenberg was the subject of furious public debate at the time of its 1975 release. Originally titled Orgy of the Blood Parasites, Shivers shocked many Canadians with its bloody gore and frank sexuality (though most of them probably didn’t actually see it). Journalist Robert Fulford trashed Shivers in a widely read article in Saturday Night magazine called “You Should Know How Bad This Film Is. After All, You Paid for It” (a slight that Cronenberg never forgot). Fulford called the movie “an atrocity, a disgrace to everyone connected with it—including the taxpayers,” since the Canadian Film Development Corporation had contributed to its production costs. The movie ultimately became a talking point in 1976 Parliamentary debates over the mission of the CFDC and whether it should have a role in funding films about sexually transmitted zombieism. Shivers was, in fact, one of the few CFDC-funded films to actually make a return on its investment, grossing more than $5 million at the box office.

Prom Night (1980)

It’s not a great movie, but it’s important in other ways. Near the end of the Tax Shelter Era, Prom Night prefigures the Canadian film industry that would follow in later years: a branch plant of Hollywood with nearly all its Canadian-ness scrubbed off. Starring Jamie Lee Curtis and Leslie Nielsen as a disco-dancing high-school principal, Prom Night trafficks in pretty much every teen-slasher convention that would later be stripped for parts by the Scream franchise.