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Diana Donnelly as Belle Browning and Kevin McGarry as Bob Tarkenton in Peace in Our Time: A Comedy.Emily Cooper

In 1938, Bernard Shaw finished the first version of a League of Nations satire that captured his frustrations with democracy and featured not altogether unflattering caricatures of Hitler and Mussolini. It was, unsurprisingly, to become the most frequently derided work of his long writing career.

"What a horrible play!" wrote one particularly influential theatre critic – that is, Shaw himself. "But I have to write plays like Geneva. It is not that I want to."

Plays are never finished, only abandoned – and Shaw kept tinkering with Geneva as the Second World War was fought and won. Now, John Murrell – the Canadian playwright best known for his 1977 home-front drama, Waiting for the Parade – has tinkered on at the behest of the Shaw Festival, in an ultimately failed attempt to whip the play into shape.

Peace in Our Time is the title now, an ironic enough name as it is, but doubly so once Blair Williams' production begins and you realize that there's not a moment's peace to be found in it. It's just Murrell yammering at Shaw, who was yammering at himself about all the different unsatisfying ways human beings are governed.

The set-up seems like an over-elaborate joke: A Jew, a Canadian, a Bishop from the Church of England, a widow from an unnamed Latin American country and a Soviet commissar walk into the Office of the International Institute for Intellectual Co-operation.

A punchline never materializes. This global village of idiots has a series of grievances that an irritating American named Liberty Belle Browning (Diana Donnelly – appropriately irritating?) duly forwards to a judge at The Hague. After several acts of chattering in various locations, everyone ends up in international court confronting three dictators: Il Duce (Neil Barclay), Der Fuhrer (Ric Reid) and El Generalisimo (Lorne Kennedy).

The Shaw Festival has now made a couple of attempts at reinvigorating its namesake's late, not-so-great plays through rewrites. In 2011, Michael Healey made On the Rocks his own, but Murrell is more of a tweaker. He's cut certain characters (though not enough of them), replaced others and eliminated some of the more overtly offensive business, tacking on a feel-good we-are-the-world ending instead.

Murrell's smartest stroke is the transformation of a previously indeterminate dominion-dweller into a self-proclaimed "conservative Canadian" named Darcy Middleman who speaks passionately in favour of parliamentary democracy – an idealistic Rathgeberian figure. Andrew Bunker is very amusing as this huffing and puffing Canuck, constantly raising his hairy, colonial arms in outrage at being mistaken for an American.

"A Canadian is not something you see every day!" remarks one of others. Yeah, tell me about it – particularly on the stages of Niagara-on-the-Lake, home of the festival of foreign accents.

On the other hand, Joseph Rubinstein (Charlie Gallant), usually referred to here as simply the Jew, is only slightly less misguided a creation than in Shaw's original; his cross-examining of the Der Fuhrer (Ric Reid, pulling some prim pratfalls) is a provocative moment, but ultimately reducing his plight to a mere side-Shoah is in poorer taste now than ever.

Peace in Our Time's main problem is the same as the International Criminal Court: a lack of binding decisions. Shaw and Murrell attempt to be specific and general at the same time, mixing together real and imagined nationalities, imaginary statesmen and historical dictators.

Williams' production is similarly scattershot – with bellowing balloons sharing the stage with more shaded human specimens like the secretary to the League of Nations (a sympathetic Jeff Meadows) and the judge (Sanjay Talwar, saddled with a strange accent eventually revealed to be Dutch).

Camellia Koo's brilliant set is the only thing really ties the silly show together and gives it an arc, as the action moves from an underground bunker to outer-space via a craftily conjured tree of life.

Let's call this experiment at redeeming Shaw's worst plays an honourable failure and move on. I'd rather see directors genuinely inspired by the original texts go at them with sheer stage inventiveness – and a sharp pair of shears – or have playwrights write their own darn plays with too many characters. Shaw may have felt he had to write shows like Geneva, but there's no good reason why the Shaw Festival has to go anywhere near them.

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