TORONTO -- An offhand remark by Goldie Hawn in the American movie "Protocol" a few years back still annoys Canadians. "I've never been out of the U.S.," the Hawn character said, "except to Canada and that doesn't count -- it's sort of attached."

To Canadian ears, what was grating was that the remark seemed not only to reveal the way many in America, especially in Hollywood, regard them but that it expressed some of the confusion Canadians themselves carry as baggage in their quest to define a distinct national identity. "The Other North Americans" constantly assert they have created a society that is unique even as they voraciously consume American culture.

Language provides French-speaking Quebec some insulation from the onslaught of American culture. Canadian Broadcasting Corp. radio forges a strong link for Canadians dispersed over a vast landscape. Canadian documentary filmmakers and fiction writers such as Robertson Davies, Margaret Atwood and Alice Munro have international reputations.

Nevertheless, three of every four books sold in Canada were published in other countries -- most in the United States. Nine of 10 records purchased here and nine of 10 of the sitcoms and dramas shown on television are imported. The six most popular television programs on the three English-language Canadian networks are "The Cosby Show," "Family Ties," Walt Disney, "Dallas," "Cheers" and "Night Court."

The shoestring Canadian motion picture industry, which survives with life-supporting government subsidies, makes only three of every 100 films shown in Canadian moviehouses. That statistic deeply troubles the Canadian intelligentsia, who argue that the problem is that Hollywood studios treat Canada as the 51st state and reap large profits here but do not reinvest to create a domestic film industry.

A new government scheme to break the lock of Hollywood on the nation's film industry by cutting Canadian distributors in on foreign profits has pitted Canada against the major U.S. studios, Capitol Hill and the First Actor in the White House. The role of the distributors is considered pivotal by Canadian government officials because they not only market films but reinvest profits in new movies.

On this issue, President Reagan has a firm grip on the details and he has registered his concern to Prime Minister Brian Mulroney. So far the Canadian government has held fast.

In defense of the proposal, Canadian Minister of Communications Flora MacDonald asked rhetorically in an interview, "What would be the response of the United States if only 3 percent of your screen time was American films, if the rest of it was from Japan or from India?

"To us culture means our identity," she said. "It means the ability to show that our differences from the United States are very fundamental to us as a country. Our parliamentary system is very different from the way you operate in a congressional system. The fact that we have a bilingual culture is different. We are talking about the soul of a nation depicted through various cultural instruments, through plays and books and films and television."

Canadians buy more than 90 million tickets each year to see American movies -- they and the Japanese are the two largest foreign markets for Hollywood products. About half the moviehouses in Canada are owned by the Famous Players theater chain, the exhibition arm of Paramount Pictures. Since the 1920s, Canada has been considered an integral part of the American film market. The deals made by Hollywood distributors for rights in the United States usually also include Canada.

The theory behind the new government proposal that has upset Hollywood and Reagan is that some of the lucrative profits made by American films in Canada would be put into Canadian films. MacDonald said she intends to introduce legislation later that would effectively ban non-Canadians from distributing independently produced films such as "Platoon," "Superman IV," "Hoosiers" and "Blue Velvet," which were not made by the major Hollywood studios. Her aides estimate that this would divert to Canadian entrepreneurs about $20 million out of the $1-billion annual film business in Canada.

Jack Valenti, the president of the Motion Picture Association of America, has denounced the plan as a "confiscatory measure." He has vowed an all-out battle against the proposal, threatening that as retaliation the Hollywood studios might consider delaying for months the release of films in Canada as is the practice overseas. Currently, new releases open in Toronto, Montreal and Vancouver on the same day they premiere in theaters in the major cities of the United States. He seems confident that rank-and-file Canadian moviegoers will be with him.

"Canadian citizens are voting on their own to go see an American film," he said. "We're not forcing them to do it."

For Valenti, the dispute is not about culture at all but about international trade precedent. He said he is most worried about the "contagion effect." If Canada succeeds in rewriting the rules, what is to stop other countries from unraveling their intricate arrangements with Hollywood in a way that could seriously erode the worldwide profits of the American film industry -- one U.S. industry that runs up a billion-dollar trade surplus each year while other American industries are losing world markets.

"This has nothing to do with the making of Canadian films," Valenti said. "The result of this law will be to make about six Canadians richer ... Parliament can't command a good film to be made."

Some in Canada agree with him. Stanley Colbert, a literary and theatrical agent in Toronto, recalled other ill-fated Canadian government schemes to build an indigenous movie industry: "All you got to do is flash the words 'national culture' and all good reason goes out the window."

Canadian governments have spent millions over the years in an attempt to bolster the weak culture industries. A web of regulations and procedures protects the cultural establishment from American competition and takeovers and they are the beneficiaries of generous government subsidies doled out to Canadian authors, painters, theatrical companies, publishing houses, filmmakers and even rock bands, which not only get government grants to cover a portion of their recording costs but also receive expense money when they tour outside Canada.

"Increasingly, American mass culture is being seen by Canadians as 'normal' culture, and Canadian mass culture as 'abnormal' culture," Canadian author and playwright John Gray has warned his countrymen. "Canadian artists have moved to the fringe of their own country. Thus, in the video rental shop I frequent the films of {the late Quebec director} Claude Jutra are classified as 'foreign' films. And in the record store, 'Canadian records' have a special bin, along with Ukrainian dances and flamenco guitarists."

The government of former prime minister Pierre Trudeau devised a plan allowing 100 percent tax writeoffs on Canadian movies. Dentists, doctors, accountants and stockbrokers drawn by the powerful lure of show biz and tax shelters scrambled to invest and the Canadian film industry made a spate of such films as "It Rained All Day the Night I Left," which were never screened and, according to most critics, never should have been.

Taking a page out of the successful Hollywood movie "The Producers," some Canadian investors discovered it was sometimes possible to make more money in the film industry by making a movie that never saw the light of day than one that did. Those films actually seeking big box offices often attempted to masquerade as American motion pictures, used fading Hollywood stars in lead roles and camouflaged the Canadian locations.

Canadian actress Colleen Dewhurst once recalled her first day on the set of a "tax shelter" thriller, "Final Assignment":

"It was supposed to be in Russia. I walked up and fingered the set. It wiggled. I was to perform in front of a cardboard Kremlin. Dear God, I knew then we were in trouble. It was another Canadian film that was supposed to fool the audience into thinking it was an American film. We Canadians are people. Surely our stories are as universal as French or German stories."

Of the many ironies surrounding the movie dispute is the fact that Canadians have been singularly successful in Hollywood where they easily pass themselves off as Americans. From Toronto-born Mary Pickford, America's Sweetheart, to Vancouver's Michael J. Fox, the All-American cover boy of the 1980s, uncommon numbers of Canadians have become stars.

If Canadians worry about being overwhelmed by American culture, they also gloat over the way they have infiltrated Hollywood. This was the theme of a satiric television documentary, "The Canadian Conspiracy," shown on Canadian Broadcasting Corp. Among the many well-known film personalities from Canada are actors Dan Aykroyd, Fay Wray, Margot Kidder, Raymond Burr, Norma Shearer, Ruby Keeler, Yvonne DeCarlo, Rick Moranis, Howie Mandel, producers Louis Mayer and Jack Warner and directors Norman Jewison ("Fiddler on the Roof," "A Soldier's Story"), Ivan Reitman ("Ghostbusters") and David Cronenberg ("The Fly").

The Canadian landscape is also increasingly commonplace as a backdrop for American movies and television mini-series because of the cheaper Canadian dollar, although few outside Canada may know that. "Superman" was shot on the Canadian prairies in Alberta. The "Police Academy" flicks are shot in the Toronto area, as were substantial portions of the recent mini-series "I'll Take Manhattan" and "Amerika." The Toronto Star newsroom posed as The New York Times city room in "The Killing Fields."

Canadians were cheered by the success last year in the United States of the Quebec French-language sex comedy "The Decline of the American Empire" and the favorable reception at Cannes this month of two other Canadian pictures, the French-language "A Zoo, the Night," which chronicles the seamy Montreal underworld, and "I've Heard the Mermaids Singing," a satire on Toronto's art world.

Among his many projects, director Jewison has opened a school in Toronto to train Canadian directors and scriptwriters, a move deeply appreciated here, and there is still a fond dream that the Great Canadian Movie will some day be made.

To guard against the ruses employed during the days of the "tax shelter" movies, Canadian bureaucrats have promulgated an elaborate set of regulations to define a Canadian film -- that is, those films eligible for government subsidies. They do not deal with content but with the nationality of those in the key roles.

"You end up in the realm of metaphysics and it gets quite ridiculous," scoffed Toronto-born Cronenberg, who writes and shoots his big-selling horror flicks in his hometown for Hollywood. "To me, it's very obvious there are huge cultural differences between Americans and Canadians, but a lot of what we are is American."