He studied film at McMaster University and graduated in 1969. He was vice president of the McMaster Film Board, a student film group where he met moviemaker Ivan Reitman.
An alumnus of both Second City Toronto and the classic sketch comedy series SCTV, Levy often plays unusual supporting characters with nerdy streaks. Perhaps his best known role on SCTV was as the dimwitted Earl Camembert, a news anchor for the SCTV News.
In March 2006, it was announced that he would receive a star on Canada's Walk of Fame. In 2002, the entire cast of SCTV was given a group star, and although Levy is not mentioned on the actual star, he was still inducted as a part of the group. This makes him one of only three two-time honourees, alongside fellow SCTV alumni John Candy and Martin Short.