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A skeleton is displayed as part of Vancouver-based artist Geoffrey Farmer's large scale installation The Intellection of Lady Spider House at the Art Gallery of Alberta in EdmontonDarryl Dyck/The Globe and Mail

Geoffrey Farmer's early foray into haunted house-making at his best friend's house had a profound effect on the boy who would grow up to be one of Canada's celebrated contemporary artists. They took over the rec room, hung fabric from the ceiling to create a corridor, made stairs out of planks resting on books and paint cans, and hung stuffed gloves from strings.

"We made figures and just collected and altered things that we found around the house," recalls Farmer, now 46 and still living in Vancouver.

"Most importantly, though, it was the first time I remember planning out what someone else might experience. I remember that this was what I was most interested in, the sketching out of a basic plan. You know: The Snake Room, The Hole of Death, The Haunted Toilet, Ghost versus Spiderman, Bowl of Severed Fingers."

Farmer, who made a splash at last year's prestigious Documenta 13 and was this year's recipient of the $50,000 Gershon Iskowitz Prize, has returned to that memory in adulthood repeatedly when he puts an exhibition together. A few years ago, he mentioned it to Catherine Crowston, executive director at the Art Gallery of Alberta. And a (black) light bulb went off.

"I pursued him about it," says Crowston. "I know that we have this big gallery space – which, when it's completely open, it's 140 feet long by 40 feet wide [43 by 12 metres] – so it has this great potential for being used in different kinds of ways."

The Intellection of Lady Spider House, on now at the AGA, has transformed the enormous third-floor gallery into a labyrinthine, walk-through haunted house. It's an immersive, theatrical experience – dark, spooky and the creepiest bit of fun you might ever have walking (and at one point, crawling) through an exhibition. And Farmer's hope is that it haunts you through the years, as his first spook house haunted him.

"I want the viewer to get lost in it," Farmer says. "Perhaps this is what haunting is, fundamentally – being chased by these kinds of memories. The biggest compliment would be if a child, once grown, might ask their parents if they were ever taken to an exhibition that was in the form of a haunted house."

The title is an inversion of American artist Bruce Conner's mixed-media assemblage Spider Lady House, made with, among other things, fur, a bird wing, doll parts, an ice skate. It's a work Farmer has been interested in for a long time, and he thought it would be a good starting point.

Farmer, the visionary and architect of the project, was keen to repeat the team effort of his first haunted house, and invited 11 other artists to participate: "I thought of the artists as the various parts of the spider and the exhibition as the web." Crowston curated the exhibition.

Before entering, visitors encounter a sign, a play on the disclaimer at the entrance of Fort Edmonton Park. "Beware," it begins, before advising visitors to proceed with caution and that the artists are not responsible. "You have been warned!"

You enter through a creaky wooden door with a broom for a handle. Inside, in the dim light, Hannah Rickards's soundscape startles with intermittent thunder claps. Ron Tran's vitrine encases creepy faces, and a few steps away a separate case contains a number of hands – also creepy.

The exhibition is divided into areas.

The vestibule, at the entrance, beckons visitors through a closet and into a storage area that pays homage to the gallery's history – with old donor boards, photos of Lawren Harris in Jasper, Alta., and A.Y. Jackson somewhere in the Rockies; and a portrait of Arthur Blow Condell, who drowned as a little boy, and for whom the previous Edmonton Art Gallery facility was named (the money was bequeathed by his mother).

Visitors travel up a wooden staircase and over a bridge where they can view the expanse of the exhibition. On the left is the Tornado/Poltergeist room, where chandeliers, severed artificial limbs, a chair, a side of beef and other weird items hang from the ceiling, suggesting objects in whirling motion.

Visitors are invited to crawl out through a candle-lit tunnel into the Courtyard/Graveyard area, dominated by Valérie Blass's melancholy L'homme paille (Straw Man) and a 16-foot rusted suit of armour, rescued by Farmer for this exhibition from its long-time home outside the entrance of a Vancouver prop shop, where he acquired many of the objects for the exhibition.

"It was important to me that what was chosen were artifacts and were used in haunted-house attractions or in horror films or theatrical productions. … And I wanted these objects to exist within proximity to the artworks," wrote Farmer in an e-mail from Britain, where he was installing at Nottingham Contemporary.

Also throughout are black foil sculptures by Hadley + Maxwell, composites of monuments and structures around Edmonton; and eerie windows by Julia Feyrer – with titles such as Blinded/Braided and Muffled/Murdered. It was a surprise that the sugar used in her Bugged/Webbed would melt once installed, but while unintentional, it's effective – the slow dripping of the brown sugar reminiscent of blood.

In the final area, the Village, visitors are invited into a thrift-store art gallery by Brian Jungen's 2003 sandwich-board work Gallery of Native Art (one of two works by Jungen in the show). There's also a disco, a creepy neighbourhood-watch window, a girl in a box and what Farmer calls a church of global warming screening a video by Feyrer that captures a snowy scene but then places it behind a wall with a window – as if to suggest snow may be something we see only in a museum one day. Off in the corner, Gareth Moore's An Ultrasonic Flute pays tribute to Alberta's status as a rat-free province. In his rat-killing kiosk, an old man (the figure comes from a now-closed Pilgrim wax museum in Massachusetts) peddles traps and poisons, and shows off the result – dead rats.

Down a dark dead end Farmer calls the Alley of Immigration, there is an opportunity to peer through a black curtain for perhaps the most bone-chilling moment of the experience: an encounter with David Hoffos's lifelike projection Marianne Sitting, from the Scenes from the House Dream series. The woman sits on the floor, tapping her toe, checking her watch and – wow – looking directly at you, it seems.

Farmer, who will have a solo exhibition at the Art Gallery of Ontario next year, and a mid-career retrospective at the Vancouver Art Gallery in 2015, made the exhibition with children in mind. Shortly before the show opened, Farmer sent Crowston's nine-year-old daughter Hana through to get her impressions. She wrote her comments on a piece of notepaper, divided into sections such as cool (severed fingers, stockade); scary (door skeleton, window of knives, mouse with no head); things to add (more blood dripping).

Farmer made the decision to make Hana's handwritten assessment part of the exhibit, placing it on the floor in the Poltergeist Room. Encountering it makes your spine tingle. Seeing that note in proximity to this wild, whimsical, nervy theatricality transports you back to when you discovered your own first haunted house, clutching onto a parent or friend, to survive the exhilarating terror of it. By the time you exit through the coffin doors at the AGA, that dormant part of you has been raised from the dead – and that is a treat.

The Intellection of Lady Spider House runs at the Art Gallery of Alberta in Edmonton until Jan. 12.

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