As I fly to Canada to meet Sarah Polley, I think about the glimpses of her in Stories We Tell – her first full-length documentary feature, which bowled over critics at Sundance and the Venice film festival and has won Canada's Film of the Year award. She looks like a contemplative Madonna on screen, with long, fair hair. She listens more than she talks. She encourages her family to speak. Her film may be her story – but she gets others to tell it. Michael Polley, her British-born father – an actor who worked for an insurance company – at one dramatic point says he will not try to "guess" what Sarah's thoughts are. But I can do nothing else. And now, on an overcast, humid morning, I am hurrying to meet her in downtown Toronto, through streets that seem a cross between Dalston and Cape Cod. Every other ramshackle shop seems to be attempting to evolve into an art gallery. One shop promises to waylay passers by and teach them how to knit. I pass more than one itinerant woman in shabby chic clothes. The lady is not a tramp – the tramp is a lady. I have never seen a city with glossier, better tended roses.

And now here it is: Cafe Diplomatico, Little Italy, nicknamed "the Dip", which has been open for business for 45 years – a Toronto landmark. I sit in the shade and wait. A tiny figure, with a tentative tread, appears on the pavement opposite. I decide it cannot be Sarah. But it is. Dainty as a dancer, she is wearing a blue denim jacket, a scarlet shirt and sneakers to match. She has a transparent complexion and guileless smile. Everything about her, including her handshake, has a lightness of touch – like her work. What is different is that she is hospitably voluble. We break the ice – not that there is much to break – with talk of Toronto. She fills me in on an "epic disaster of the mayor who has been accused of smoking crack" (he denies it) but otherwise describes the city as "diverse, tolerant, multicultural". She adds: "I love living here – I have always lived here, it is an easy city."

She orders brunch ("two eggs over easy with bacon and HP sauce"). She already has a classy track record as a film director. In 2006, she directed Away From Her, about a woman suffering from Alzheimer's (Julie Christie was nominated for an Oscar). In 2011, her second film, Take This Waltz – a love story starring Michelle Williams – split opinion (I loved it; Peter Bradshaw in the Guardian could barely contain his contempt). All Polley's films, in different ways, explore marriage and its complexities with compassionate grace. And Stories We Tell, five years in the making, is no exception. It is a cine-memoir of Sarah's parents, an extended family's portrait of itself. And it includes a stunning secret (it would spoil the film's delicate detective work to spill it). Besides, what gives the film its distinction are the questions it raises that reach beyond plot: do we own our own stories or do they own us? Is there such a thing as emotional copyright? And why is memory a teasing resource?

Michael Polley is the film's chief narrator. For years, he was an author in search of a subject. Now Sarah has given him one. His quirky, engagingly self-deprecatory commentary contributes hugely to the film's charm. Like a father surveying his family from the head of a dining table, he reads aloud, savouring the narrative. Even when it is at its most uncomfortable, he seems in his element. I tell Sarah I have been speculating about Michael's writing and her film-making and wondering: were they each driven by the same need to control out-of-control experience? "I was more concerned the film should include everybody's version and not be one-dimensional," Sarah says, but concedes: "Telling stories is our way of coping, a way of creating shape out of a mess. It binds everyone together." Yet her film also reveals that everyone has a subtly different story to tell. Memory is not a convenient barn in which truth can be stored through successive winters. It is permeable, unreliable and personal. And it is complicated because, in a family, as Polley points out, everyone is "committed" to their own version of the truth.

This family consists of Sarah's sister Susy (51), a thoughtful GP, and her brother John (50), a winningly camp casting director – the children of Sarah's mother's first marriage – Mark (45), a delightful lawyer, and Joanna (41), an attractive teacher with a PhD in philosophy. Michael's the father of the last two, along with Sarah who, at 34, is the youngest of this open, intelligent, likable bunch. It was "easy" to interview her family, she says, because, "There are no taboos at our dinner table. There was nothing I felt uncomfortable asking. It is not often you get that freedom interviewing." I can imagine because I feel a similarly relaxed freedom talking to Sarah.

What binds the "children" is their mother, Diane Polley – an actress and casting director – who died when Sarah was 11. The film is a loving but complicated homage. It includes many friends – all of whom have versions of her. Geoff Bowes, a fellow actor, remembers the infectious gaiety of acting with her in Montreal. Another friend, Mort Ransen, speaks of her fear of cancer and likens her to a trembling bird. Film producer Harry Gulkin describes her magnetism and takes Sarah to task because he wants the story told his way. What is moving is how keenly everyone feels the loss of Diane, more than 20 years on.

The film mixes Super 8 home-movie footage and convincing reconstructions also shot in Super 8 – Diane is played by Rebecca Jenkins (who knew her in life). She emerges as a woman who had the gallantry to treat life like a party even when it did not return the compliment. Is Sarah at all like her? "Some people say I am – but I'm more restrained." She sees herself as a part-time extrovert. "I oscillate between being watchful and out of control." Sarah is surprised but not displeased the faux footage has fooled audiences: "I had been wondering, in my own life, what was real and what wasn't. I wanted people to have the same question in their minds."

Making the film has changed the way Sarah sees her mother. She used to think her "vibrant but distracted – not engaged enough with me". Now, she feels "a lot more admiration. She was competent and beautiful [unusual to dovetail these adjectives]. She had five kids, commuted to work and yet she slept so little. She took care of us brilliantly. We would always have a good dinner on the table – usually with home-baked dessert. She did so much – perhaps it is not such a surprise she died at 53."

Characterising a parent is an odd business because it involves detaching from the early, unquestioning relationship and, on one level, becoming your parent's parent in the process. "When I watch the black-and-white footage of my mother auditioning, staring out into the audience, I feel maternal about her," Sarah says. This is a fantastic moment in the film (no reconstruction involved). Diane sings a spoof of Ain't Misbehavin' called I'm Misbehaving. But actually, she is on her best behaviour. She is nervous (biting her lower lip) and vulnerable (apologising for fluffing the song's last line). Sarah sees her as "exposed" – here and elsewhere. She wonders how her mother would have felt about the film. And she minds terribly – is fearful "conservative" people will judge her mother censoriously. She finds it "nerve-racking" to think anyone might find her wanting.

Diane Polley was used to harsh judgment. After her first marriage failed, she was the first woman in Canada to lose custody of her children, permitted to see John and Susy only once a month. One of the film's most moving sequences records the feelings about this cruelty all these years later. Sarah even found – and filmed – a newspaper cutting reporting on the case. "As a middle-class woman with a career, it is unimaginable to think of a woman having her children taken away because her 'desire for a career overtook her domestic duties'." Sarah was "staggered" to find an article that coldly spelt out that, for Diane, this was "the cost of adultery". During her childhood, the case had understandably been "underplayed". Sarah now smarts on her mother's behalf to think of the "shame" she must have felt. She adds that she was never under any illusions about her mother's "devastation and guilt at losing Johnny and Susy".

And then Sarah tells me – at my prompting – about her last memory of her mother: "A few days before she died and just before she went into a coma, I remember Dad dancing with her to Blue Spanish Eyes – one of her favourite songs. He was holding her on his feet as she couldn't stand and she started crying. And I remember him saying to make her laugh: 'I never could stand dancing with a woman who cried.'" The love Michael felt for her is still visible in the film – although he makes no bones about the difficulties of their marriage, freely describing it as "stale" and blaming himself. He is hilarious in the process, claiming: "A night with a dead wombat might be more exciting than a night with me after 12 years."

When Diane died, on 10 January, 1990, Sarah and Michael were left to their own devices. It was "a very, very dark period. My dad is very open about this in the film. We all, in various ways, fell apart. It felt like the house was coming apart at the seams – the disarray of loss." A snap of Sarah and Michael shows them smiling alongside a tall snowman they had created: an image of playful togetherness. He tried hard and, to some extent, rallied. He taught himself to cook "amazingly". And, looking back, Sarah acknowledges that "taking care of me became the centre of his life". But, she explains: "Being a parent was not how Michael would describe himself. This was not a traditional father-child relationship. He never strove for that. He looked up to his kids. He treated kids as equals – for better or for worse. He'd speak to you with respect. And you had a responsibility that most children would not have. We became very close." She remembers staying up until the small hours talking about books with Michael "and smoking" – she laughs – and "not wanting to be anywhere else".

Sarah Polley: Stories We Tell Photograph: Roadside Attractions/Rex Features

But there was one puzzle that did not go away. Sarah grew up with a family joke that she did not look anything like her siblings. Where did the reddish hair come from? Her mother used to laugh about it. There were other things she did not share with her siblings either. "I am highly strung, neurotic about responsibility and punctuality. I am compulsively early – I get to airports three hours early." In the film she determines to find out whether the joke has substance, a quest that will eventually lead to a "sick feeling of responsibility and an enormous crushing guilt that laid me out for a few weeks. I got really, really ill. It took a friend to clarify for me that finding a story is not the same as creating one." George Bernard Shaw wrote: "If you cannot get rid of the family skeleton, you may as well make it dance." In the film, that is what Sarah does.

Her first career was an actor. And she has not given up on it now – although with the directing and writing (she is working on a screenplay of Margaret Atwood's Alias Grace) there has been no spare time. She made her acting debut aged four and is critical of the way child actors are treated. At nine, her role in the Canadian television series Road to Avonlea made her name and enough money with which, much later, to think about making a film. At 14, she left home. At 15, she moved in with a boyfriend and, at 16, she was living on her own with "lots of rotting potatoes under the sink and a lack of life skills". It was at this time that she famously got "roughed up" by riot police protesting at a conservative government cutting welfare benefits and lost two back teeth. At least that was her story. "At 15, I exaggerated constantly," she laughs.

In 2003 she got married, to David Wharnsby, a film editor. She describes him as "a really great person" but the marriage did not last and, in 2011, she married David Sandomierski, a lawyer with whom she has a 16-month-old daughter named Eve. There is a memorable line from Take This Waltz that goes: "Life has a gap in it, it just does." And Polley believes: "We blame relationships for that gap. We are never going to feel that life is complete but we live in an age that tells us that this is a problem." She thinks it too easy to "blame the person with whom we are sharing our life".

So does she see marriage as a doomed enterprise? "I think marriage is crazy and optimistic – and that is what is great about it. I like bold gestures that aren't necessarily backed up by statistics. I feel really committed to it. But my family is enormously judgmental of the institution. When I said I was getting married for a second time, the interrogation lasted many months. And during the ceremony, when the congregation was asked whether anyone objected, five hands went up. The officiator just said: never mind." And then she relates how Michael made a speech that "sounded like it would go somewhere really nice, then didn't. He wound up saying that when he married, in 1967, his one hope was that his children would never feel they had to participate in something so absurd."

Whatever the friendly difference of opinion about wedlock, the remarkable thing is that when pressed about her family's reaction to Stories We Tell, Sarah reveals that everyone is happy with the film and has been "supportive". What's more, there is a freedom now, a sense that "the story does not belong to anyone". And telling it has brought her closer to Michael. She sees the harnessing of his writing talent as "something my mother always wanted, a last thing I could do for her". But she wants to impress on me that she still regards her story as ordinary, whatever others may say. It is the remembering that matters. Michael quotes Pablo Neruda: "Love is so short, forgetting so long." Since making the film, she volunteers, she keeps hearing stories far more "extraordinary" than her own. And then she turns to me: do I have a family secret? All families, she suggests, do. "And the ones that don't think they do have not scratched the surface hard enough yet."

Stories We Tell is released in cinemas on 28 July. You can also watch it from that date on guardian.co.uk/film, for £9.99.

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