Top-grade theater in a pretty lakefront Canadian town

Two of eastern Canada's best-kept secrets were sprung onval; the other, the handsome old town of Niagara on the Lake, which has quietly put GBS on the boards for 20 summers. That either could flourish unknown to me within a few hours of my door makes me wonder what else I've been missing all these years.

There are reasons, it seems, for this dual obscurity. Niagara on the Lake, for all its leafy, Georgian elegance, is simply not on the trail to anywhere (unlike the Shakespeare Festival at Stratford, Ontario). It lies at the end of the splendidly uncommercial Niagara Parkway about half an hour from the fizz and glory of Niagara Falls, peacefully nudged by Lake Ontario. Another built-in charm is the distinct lack of lodging in the area: no high-rise hotels; indeed, no high-rise at all.

''It's simple math,'' said a Shaw Festival official the day after ''Pygmalion'' opened the 1982 festival in late May. ''On a given night we have 1 ,400 seats in three different theaters, and the town has 500 hotel beds. That means a lot of trucking and bussing back and forth the same day. We appeal mostly to Buffalo because it's close enough to drive both ways.''

Buffalo, less than an hour's drive if you navigate properly from the airport, and Toronto, 90 minutes away, are the two chief springboards to Shaw. Following the Niagara Parkway, so devoid of billboard come-ons, you have to squint hard to learn of such roadside attractions as historic sites and peach orchards, not to mention top-grade theater and a gorgeous lakefront town.

Even as I relaxed that first afternoon in a sidewalk cafe on Queen Street, the main commercial artery, and scanned the local papers, I was hard put to find much said about the festival, which was only a few hours from opening a four-month season (it closes Sept. 26). Nor does the town sell fudge, antiques, or Canadiana - three Queen Street fixtures -- any more aggressively than Shaw. Niagara on the Lake, I could already see, demands more than the usual from its visitors.

When the festival is in full midsummer swing, performances are held not only in the main theater on the edge of town but also in the smaller Royal George and the Old Court House on Queen Street. It was in the ivy-draped Court House (where on the first floor today one can collect tourist brochures) that the Shaw Festival had its modest debut in 1962. Brian Doherty, a local lawyer and Shaw admirer, helped launch the festival to give the town a needed financial boost. It staggered for a while, but in 1973 moved its main quarters to the new Festival Theater, an attractive and well-ventilated building of glass, brick, and British Columbia redwood an easy summer stroll up Queen Street.

Shaw, though he wrote 30 full-length plays, is not the only show in town. In addition to his ''Pygmalion,'' ''Too True to Be Good,'' and ''The Music-Cure,'' the festival will also stage ''See How They Run,'' by Philip King; ''Camille,'' by Robert David MacDonald; ''Cyrano de Bergerac,'' by Edmond Rostand; ''Les Ballets Jazz de Montreal, the Singular Life of Albert Nobbs,'' by Simone Benmussa, based on the short story by George Moore; and ''The Desert Song,'' a pocket version of the Sigmund Romberg operetta. (Contact Shaw Festival Box Office, Box 774, Niagara on the Lake, Ontario, Canada LOS 1JO).

Christopher Newton, the festival's artistic director, seldom takes the predictable route, a source of occasional bafflement to his local backers. ''Pygmalion'' proved no exception on opening night. There was no mistaking the controversial 1912 play that years later spawned the musical ''My Fair Lady,'' but in the hands of a frizzy-haired young British director, Denise Coffey, it had some new wrinkles. Throughout, a bearded, knicker-clad Shaw (Herb Foster) invested the play with his puckish, scalding wit, acting as narrator and stage director and even filling some small parts. There was no lavish Lerner and Lowe scenery, merely a six-sided black platform with a few bentwood chairs, but the costumes and the Shavian substance were all that Henry Higgins (Barry MacGregor) and Eliza Doolittle (Nicola Cavendish) needed.

When I wasn't wallowing in opening-week festivities, Niaraga on the Lake provided considerable diversion. I think the best way to appreciate the town's rich and sometimes rocky history is to visit the steepled, brick Niagara Historical Society museum and then take a walking tour (only $1.50) with a society guide. Niagara on the Lake was settled by Loyalists who fled the United States during and after the Revolution, and some of the objects they hauled north on the difficult journey -- a rough-hewn ca. 1760 table from Pennsylvania, for example -- are displayed.

When you speak of ''the war'' around the Niagara Peninsula you mean the War of 1812. This point was made assertively by Mrs. Ann Stokes of the Historical Society on a simulated walking tour we took by car to avoid a morning drizzle. She said the town was planned in 1791 by the British Royal Engineers on a Roman grid with 99-foot-wide main streets; it was burned to the ground by American forces in the war.

There are but three substantial lodging places in town. I stayed at the Pillar and Post, a 90-room inn that rambles around a one-time fruit and tomato cannery. The hotel rents bikes, an ideal way to cover the sprawling township.

On Queen Street in the heart of town stands the Prince of Wales, a more formal, mid-Victorian, red brick hotel; down on the lake is the Oban Inn, with 23 rooms and a cozy, low-ceilinged dining room. The Oban's lounge has a section called Shaw's Corner, presided over by a large portrait of GBS, with a wall full of photos of past festival performances. Watch what you say in Shaw's Corner. The master may be listening.

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