Beloved artist to nation: "Keep Your Mouths Shut"

Jesse Brown, a BoingBoing guest-blogger, is the host of TVO's Search Engine podcast.

Norman McLaren is well-known to Canadians as the creator of the Oscar-winning anti-war animation Neighbours (which seemed to air every hour past midnight on public TV when I was a kid).

But the NFB's extensive and amazing archives contain a wealth of other McLaren creations- including the following piece of terrifying WWII propaganda:

Were there Nazi spies in Canada during WWII or was McLaren a paranoid propagandist?

I am completely ignorant about this period of Canadian history- can some BoingBoinger educate me?