Harry, who is not religious, designs a pair of trousers meant to be impossible to crease, and appeals to Zaida for $500 in investment, claiming he already has many orders for the product and will be able to pay back with interest in one month. When Harry demonstrates his "pressless trousers", his own business partner points out the bulges in the knees, spoiling any chance Zaida will invest. Enraged, Harry rants about marrying into an unintelligent family, condemns Zaida as a miser and not a real Orthodox Jew, and says Ferdeleh should be killed. David overhears these threats made by his father and is disturbed and embarrassed for the way he has spoken of his family, particularly Zaida. In attempt to comfort his grandfather, David informs Zaida that his father tells "terrible lies". While David hopes to ride with Zaida on another Sunday, Harry insists instead on taking David fishing. However, Harry actually takes David to a gambling club, and talks of leaving the ghetto behind. With orders on the defective trousers cancelled, Harry goes into bankruptcy and the family's plans to move are cancelled, to David's joy. Annie gives birth to David's baby brother, and David becomes jealous his brother gets to breastfeed. Finally disillusioned with the deceptions of all adults, David covers Mrs. Tannenbaum's steps with horse excrement. The police arrive and discover Zaida's stable is in violation of bylaws requiring stables to be located 100 yards from residences. The police give Zaida 30 days to move it, but he resolves not to. He instead becomes gravely ill, and David is sent to his uncle to avoid a spread of the illness. When he returns, Harry tells David that Zaida and Ferdeleh have both died. Distressed, David runs from home and imagines his grandfather returning. "Lies My Father Told Me" was entirely filmed in Montreal. The Film's use of Mount Royal and The Plateau has been widely appreciated by audiences for these locations' "stunning" visual aesthetics. Telefilm Canada, formerly known as the Canadian Film Development Corporation, is the Crown Corporation that produced the film and is fittingly headquartered in Montreal. "Lies My Father Told Me" was produced just a year before the CFDC's annual budget was increased to $25 million by the Federal Government of Canada. Producer Harry Gulkin believes that the film's strong reception within the Jewish Mile Neighbourhood in Montreal is due to its considerable "local sensibility".