Big Trouble in Cottage Country

The house is a study in greige, from its unfussy concrete patio stones and faux-rustic ledgestone veneer to the practical slope of its asphalt-shingled roof. Big and blocky, it’s sandwiched between similarly oversized homes on a sparsely landscaped cul-de-sac, like a Monopoly property strategically plonked down to maximize ROI. The cut-and-paste interior is engineered for maximum rentability: the carefully staged comforters, accent throw pillows and framed word art all look like they were snapped up during a single lap through HomeSense. One aggressively cheerful print insists, “YOU CAN NEVER HAVE TOO MUCH HAPPY.”

But the real selling point of the five-bedroom, three-bathroom property is its proximity to the beach. It abuts a sand dune in a quiet corner of Tiny, Ontario, just a three-minute walk from Bluewater Beach on the southeastern edge of Georgian Bay. The township—a low-rise stretch of cottages and year-round ­residences—is home to roughly 13,000 full-timers and, thanks to a quirk of geology that scientists don’t fully understand, what may be the purest water on earth. It was dubbed Tiny in 1822, after a Cavalier King Charles spaniel that belonged to the wife of the lieutenant-governor of Upper Canada.

A Toronto-area real estate broker named Calvin, who asked that we not publish his last name for fear of reprisal from locals, bought the property in September of 2021 for $1.1 million. He wanted to spend time there with his family, but it also came with a $6,000 monthly mortgage, so he listed the home on Airbnb. In the summer months, he charged $1,500 a night; during the off-season it was roughly half that price. The sprawling rental, advertised for up to 16 guests and outfitted with a hot tub, a sauna, a trampoline and a volleyball court, drew a mix of renters: golfers, families, weekenders from the city. Almost immediately, neighbours began to complain about the noise, the garbage, the constant turnover. In the fall of 2021, 30 guests attended a wedding on the site, flouting Covid restrictions. On two separate occasions, guests apparently tried to ignite a propane grill using charcoal, sending flames shooting into the air. The neighbours made no effort to hide their scorn, filing well over 100 complaints with the township since Calvin bought. Signs declaring “homes not hotels” were posted on the periphery of the property. According to Airbnb reviews, some locals even recorded renters while they were using the hot tub.

Related: Where to get a dream cottage for less than you think

Calvin says he hopes to pass the place down to his kids someday, and that may well be his endgame. But he also runs a side business mentoring fledgling investors, and a big part of his advice involves short-term rentals—which he pitches as high-yield assets that deliver guaranteed returns of at least 30 per cent. Calvin isn’t the only Torontonian to have spotted opportunities in the region. During the pandemic, investors from the city descended on Tiny, hoping to turn beach access into a revenue stream. Entire strips of the town were taken over by what residents described as “ghost hotels,” empty cottages run by absentee landlords, rented out every weekend to a new batch of strangers.

Locals pushed for action, and in August of 2022, the town council introduced a by-law governing short-term rentals. It required that all rentals be licensed and follow a strict set of rules, including occupancy caps and limits on how often and how long homes could be rented. When Calvin submitted an application for a licence, he mistakenly filed it under his own name, not the corporation he’d transferred the property to. This clerical error voided his application, but the township refused to refund him the $1,500 application fee. He never reapplied.

By the fall of 2023, the town council had accused Calvin of at least 15 by-law violations, including operating without a licence, advertising without a licence, and breaching occupancy and minimum-stay rules. But licensing by-laws aren’t silver bullets. Proving a violation can be difficult—by the time enforcement officers investigate, guests are often gone, and inspectors don’t have access to information about how often a property is rented or to how many people.

Related: The case of the cottage country renovation scammer

That October, a prospective renter reached out to Calvin through Airbnb, saying he wanted to book the house for a single night to celebrate his anniversary with his wife. It was an odd request: the place was way too big for a couple, and the property typically had a two-night booking minimum. Still, Calvin accepted the booking and didn’t give it much more thought. Two months later, he received an email from the township with a photo attached—a picture of an unmounted smoke alarm, taken inside his property. The anniversary guest, it turned out, was a private investigator, hired by the township to gather evidence against Calvin.

The sting was, according to the town council, a necessary tactic. At a meeting in early 2024, Tiny’s chief municipal law enforcement officer, Steve Harvey, justified the approach by pointing to the volume of alleged violations at Calvin’s property and the insidious spread of short-term rentals across the township. A private investigator, Harvey explained, offered certain advantages: they could book a stay, obtain receipts and snap photos, and because the hire was made through the town’s lawyer, details would be protected by client confidentiality (from nosy journalists, presumably). Town officials said they use private investigators only in “extreme cases” but refused to elaborate on what constitutes “extreme.” They also wouldn’t disclose what the investigator found or how much the operation cost. When I tried to obtain documents related to the investigation through freedom of information requests, the township said they were in the custody of its law firm and not subject to disclosure. According to court records, Calvin now faces a total of 25 municipal by-law charges. The case is ongoing, with a pre-trial appearance scheduled for late August.

Calvin, who is Chinese Canadian, didn’t grow up cottaging. When he bought the waterfront property, he felt like he was fulfilling a fantasy that has traditionally been out of reach for many immigrant families. Now, he’s Tiny’s public enemy number one. He’s emotionally and mentally exhausted—and so are his neighbours. In a way, so is all of cottage country. In Simcoe County, Muskoka, Kawartha Lakes and beyond, town councils, residents and hosts are clashing over how to regulate short-term rentals and how to enforce the rules. What’s driving the drama? That depends who you ask. It’s NIMBYism. It’s classism. It’s good old-fashioned racism. It’s entitled property owners, entitled out-of-towners, entitled small-town politicians. It’s tourism. It’s capitalism. It’s also the creeping panic of watching a familiar place fill up with unfamiliar people. But, any way you look at it, it’s a vortex of frustrations that threatens that most Canadian of summertime pursuits: spending time by the lake.

Today, cottage country is a splashy summer playground for the financially buoyant, but there was a brief window when it was much more readily within the grasp of the middle class. Thanks to post-war economic growth, a Crown land fire sale, widespread car ownership and a burst of provincial infrastructure that included massive highway expansion, more people could access Ontario’s 250,000 lakes. By 1960, the province had around 100,000 cottages—roughly one for every 61 residents. Then, in 1970, Ontario rolled out a new property assessment system, and many cottage owners saw their property taxes double and even triple. Cottage ownership was suddenly unattainable for many would-be buyers, and even those who had inherited family properties found themselves struggling to keep them. Over time, a new two-tiered pattern emerged: to help cover costs, owners started renting out their places a few weeks each year to people who wanted to participate in the tradition of cottaging but had been priced out. As renting became more common, it also became more formalized. What had once been a neighbour’s cousin’s referral evolved into a sub-economy of management companies and searchable listings. Then came Airbnb. While the booking platform didn’t invent cottage rentals, you can bet it scaled them, branded them and made them impossible to ignore. Suddenly, anyone could book a weekend on your lake, no family friend required.

After the pandemic hit and remote work became the norm, cooped-up Torontonians fled the city for lower-density pastures. Some 64,000 residents decamped for other parts of the province, many heading north. As of 2021, two of Canada’s fastest-­growing communities—Collingwood and Wasaga Beach—were in cottage country; Wasaga alone saw its population jump by more than 12 per cent between 2019 and 2022. And the price of real estate followed the same trajectory. Between 2020 and 2021, recreational property values in Ontario’s most popular summer spots soared, with average prices rising 35 per cent—the biggest increase in the country. Prices in Tiny rose 44 per cent, with the cost of a typical single-family home climbing from $633,000 to $911,000.

In 2021, rare was the day when Dan O’Rourke didn’t find at least one letter in his mailbox from someone wanting to buy his house in the town’s Lafontaine Beach area. Overwhelmingly, they were from people who had no intention of moving to Tiny full time. “Every house that sold in my area was turned into a short-term rental,” says O’Rourke. There were seven on his street alone. From scrolling through Airbnb and Vrbo, O’Rourke estimated that there were 64 in his neighbourhood and more than 500 in the township. The Federation of Tiny Township Shoreline Associations, a volunteer-run advocacy and watchdog group, had been registering concern for years. In 2019, it surveyed full-time and seasonal residents about short-term rentals. The respondents lodged a litany of complaints, including loud music, large groups, late-night parties, overflowing garbages, overcrowded beaches, overloaded septic systems, firecrackers, broken glass, cigarette butts, guns, ignorance of boating etiquette, a rental with porta-potties instead of a bathroom, unattended fires, damaged property, verbal assaults, ineffectual by-law enforcement, hooligans and “strangers.”

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One stag party in Oro-Medonte featured strippers on the back deck; another lasted three days, leaving behind the stink of sewage

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A year and a half later, the township finally drafted short-term rental regulations and assembled a task force to address residents’ concerns. It didn’t go swimmingly. One frustrated town councillor resigned in September of 2021, stating in an open letter that “council and some senior staff have sidestepped the issue for so long that it may be unfixable.” Six months later, the task force collapsed after one member threatened legal action against another. The residents of Tiny were more divided than ever. O’Rourke, a member of the disbanded task force, says he was spat on in a grocery store by a short-term rental owner. Calvin claims that someone deliberately placed dog feces in front of his guests’ vehicles. The town’s chief administrative officer urged people on both sides of the issue to “stop sabre-rattling.”

Glen Sloutsky and his wife bought their home in Tiny in February of 2020, just weeks before Ontario declared a state of emergency in response to Covid. They spent much of the early pandemic in Tiny but kept an apartment in the city. The couple wanted to continue splitting their time between both places but knew they couldn’t afford to without renting their home in Tiny. Sloutsky had researched which Ontario municipalities allowed short-term rentals before their purchase, and Tiny’s website, he says, explicitly stated that cottage and home rentals were permitted under the zoning by-law. That summer, they listed the property.

Their experience with unfettered renting was short-lived. In mid-2022, Tiny became one of the first cottage communities in Ontario to require that short-term rentals be licensed. The by-law capped the number of licensed properties at 300 and limited rentals to 92 days annually, with a minimum six-night stay from April to October. Occupancy was set at a maximum of two guests per bedroom, up to 10 total. Owners had to pass fire and electrical inspections, submit floor plans, and designate a “responsible person” to respond to complaints within an hour. The annual fee was set at $1,500—it has since climbed to $1,750—and penalties included fines and a demerit point system that could lead to licence suspension or revocation. A related zoning by-law set out, among other things, parking rules and required that short-term rentals be a secondary use, not the property’s primary function.

Around the time the by-laws passed, Sloutsky and a few other short-term rental owners founded the Responsible Hosts of Tiny to coordinate opposition, raise legal funds and rally owners caught off guard by the new regulations. On the other side, a residents’ association called Good Neighbours Tiny formed to promote “the restoration and preservation of family-oriented, child-safe neighbourhoods.” Both groups appealed the new zoning by-law to the Ontario Land Tribunal. ­Responsible Hosts argued that the rules unnecessarily punished conscientious owners and effectively banned a ­long-standing, low-impact rental tradition. Good Neighbours, meanwhile, claimed that short-term rentals should never have been allowed in residential zones to begin with.

The problem with one-size-fits-all by-laws like Tiny’s is that they don’t distinguish between owners who rent to friends and family a few times a year, those who welcome vetted vacationers through third-party platforms, responsibly run full-time commercial operations, and absentee landlords with little regard for who rents their property or why. Because most municipal zoning by-laws in Ontario were written decades ago, they rarely account for short-term rentals directly. As townships revise their rules, they’re grappling with the fact that these kinds of rentals blur the line between residential and commercial uses—they’re used like homes but behave like businesses. Case law is still evolving, leading to a patchwork of precedent. Some towns, like the Blue Mountains, have successfully banned short-term rentals from residential zones. Others, like Puslinch, south of Guelph, have bounced between bans and court challenges, showing just how messy zoning can get.

In early 2023, Sloutsky asked council to pause by-law enforcement so the township and residents could have another shot at finding a mutually agreeable solution. The council voted down the motion. Soon afterward, Responsible Hosts filed a legal challenge with the Ontario Superior Court, arguing that the town was trying to regulate short-term rentals out of existence by imposing onerous and expensive requirements that made it hard for owners to break even. The rules were strict, but whether they constituted a functional ban was debatable. Mayor Dave Evans dismissed the group’s efforts and called those who wanted to repeal the by-law “delusional.”

The ins and outs of the short-term rental regulations may at times be difficult for the township’s residents to parse, but the reason for the by-law itself seems crystal clear to Calvin. “They say they’re trying to maintain the fabric of the community,” he says. “They have a specific idea of who belongs here.” In Tiny, the binoculars were out—not for spotting wildlife but for tracking city folk who were turning the community into something locals didn’t recognize.

Ninety minutes north of Toronto, the township of Oro-Medonte has rolling hills, canopied forests and a 40-kilometre stretch of Lake Simcoe’s northwestern shoreline that draws outdoorsy visitors year-round. According to a compendium of complaints compiled by a local anti-short-term-rental group, weekend warriors turn it into a lakeside bacchanal: busloads of partiers dropped off for all-night ragers, entire hockey teams howling into the early hours, dirt bikes tearing through residential streets, boats weaving dangerously close to docks, a property rented to 10 groups in a single month. One stag party featured strippers on the back deck; another drew more than a dozen cars and trucks to the property and lasted three days, leaving behind the stink of sewage, likely the result of an overtaxed septic system. In nearby townships, guests’ reported bad behaviour included funnelling beer, urinating and vomiting on the lawn, doing drugs off the hoods of cars, and shooting fireworks at one another.

Oro-Medonte has been trying to do away with short-term rentals for the better part of a decade. In 2018, as a stopgap, council passed an interim control by-law: no new rentals while the township studied the issue, but existing ones could keep operating. When that by-law expired in 2020, rather than introducing a licensing system, as other municipalities were doing, Oro-Medonte tried claiming that short-term rentals were already prohibited—everywhere except the condos and townhouses in Horseshoe Valley Resort and its next-door neighbours, Carriage Hills and Carriage Ridge—under a zoning by-law provision made five years earlier.

That didn’t make sense to some local cottage owners, who got together to form the Oro-Medonte Association for Responsible Short-Term Rentals. The group went to the Ontario Land Tribunal, which found in their favour, ruling in 2022 that the township’s zoning approach was overly broad and legally unsound and that it unfairly penalized “benign, non-contentious” cottage owners who occasionally rented out their properties.

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Needing a break, one couple in Oro-Medonte left on a short vacation and rented their home out on Airbnb. Neighbours went ballistic

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In response, the township appealed the decision to the Ontario Superior Court, joined by the Oro-Medonte Good Neighbours Alliance, a special interest group that took a hard line against short-term rentals. That fall’s municipal election ushered in a first-time mayor, Randy Greenlaw—who ran in part on an ­anti-short-term-rental platform—and councillor Peter Lavoie, then president of Good Neighbours. The new council tried to double down on enforcement despite the unsteady legal footing. Signs reading, “No one wants to live near a disruptive short-term rental,” provided by Good Neighbours, popped up on lawns. In 2023, two owners were charged with operating illegal short-term rentals only for the charges to be dropped on the advice of the township’s legal counsel. Several local hosts say they received threatening letters from the township and their renters were harassed by by-law officers sent door to door. The township claimed that, pending its appeal, it was simply enforcing the 2018 stopgap by-law. Except, as the Responsible Short-Term Rentals group pointed out, the by-law didn’t ban short-term rentals; it only froze the creation of new ones.

In March of 2024, Ontario’s Superior Court upheld the land tribunal’s decision, striking down Oro-Medonte’s zoning by-law amendment seemingly once and for all. And yet, on its website, the township continued to insist that short-term rentals were allowed only in the units at Horseshoe Valley, Carriage Hills and Carriage Ridge. “It’s nonsense, and it’s a lie,” says Tammy DeSousa, a former town councillor who served from 2019 to 2022. DeSousa doesn’t own a short-term rental. “I’ve got no skin in the game,” she says. “But I believe people should have the right to rent out their properties. We’re in a tourist town with a beautiful lake—why shouldn’t it be shared?”

Oro-Medonte is now drafting a licensing by-law, but it would apply only to those three resort developments. When I got in touch with the township, officials declined to comment on its proposed short-term rental by-laws, the reasoning behind its approach—which seems to defy multiple legal decisions—or why it’s drafting rules that apply only to a few buildings in which no problems have ever been reported. Officials would say only that they hope to have the new rules in place sometime this summer, a timeline that seemed wildly ambitious.

The township has already spent more than $1 million pursuing the issue, and DeSousa believes the draft by-law, if passed as is, will only invite another legal challenge and more costs for all residents. “Stop throwing our taxpayer dollars out the window with failed attempts to beat a dead horse,” she wrote in an email to the town council in April. What she’d like to see instead is a township-wide licensing regime—something fair, enforceable and focused on managing actual problems, not on banning all rentals outside a very limited zone.

Meanwhile, some owners, including those offering the kind of “benign, non-contentious” rental the land tribunal’s original 2022 decision sought to protect, are left in the lurch. One of them, a local teacher, began renting out her five-bedroom ski chalet—her primary residence—on Airbnb in 2017, after a divorce. “I needed money,” she says. She rents it out a few weeks per year, books only guests with five-star ratings and has a hard six-person cap. Last year, she made roughly $5,000. Her side hustle puts her on the wrong side of the proposed by-law, so she keeps it quiet, telling only friends and neighbours. “It’s like a dirty little secret,” she tells me—not so much embarrassed as tired of pretending the uproar makes sense. To her, the debate over short-term rentals is about privilege. She says there’s a sense of entitlement among the rich, white, over-55 crowd in Oro-­Medonte, the people who don’t worry about how they’re going to pay for life’s extras. The teacher, on the other hand, is now part of a blended family of seven that includes three kids in competitive sports. “We both work full time in education, and our expenses are high,” she says. “I’m just hoping I don’t get caught.”

While townships were cracking down on short-term rentals, the market was doing some correcting of its own. After ballooning in 2022, the pandemic bubble started to deflate. Rising interest rates and return-to-the-office mandates led cottage country transplants to sell. Between 2022 and 2023, cottage prices across Ontario’s vacation belt plummeted as much as 60 per cent. And while data from Royal LePage shows that markets across Canada are stabilizing—four per cent year-over-year growth compared with an unsustainable 27 per cent in 2021—Ontario’s recovery is the slowest in the country. Even Muskoka, the crown jewel of Ontario cottage country, has been affected: average prices there are down 6.5 per cent compared with last year.

Most of the buyers that Maryrose Coleman, a Muskoka real estate agent with Sotheby’s, worked with during the pandemic were searching for properties they could enjoy with their families. But, as Covid dragged on, some looked at the skyrocketing demand for rental cottages, saw dollar signs and made impulse purchases thinking their rental income would cover costs. “They saw a cottage renting for $25,000 per week on Lake Muskoka and thought it was going to be like that all year,” says Coleman. “But it’s a hyper-seasonal market—maybe six to eight weeks. No one rents in Muskoka in the winter at that price.” One buyer she knows believed they’d be booked from Easter through to the end of summer. Instead, they found themselves spending almost $9,000 a month to carry the property.

It’s only getting harder to make a business of cottages. Since 2022, all six of the municipalities in Muskoka have implemented their own licensing regimes. The one in Muskoka Lakes comes into full effect next year, with new rules that limit waterfront properties to one rental group per six-night stretch between Victoria Day and Labour Day. It will also force owners to block out one full week in each of June, July and August when the home cannot be rented at all. Coleman estimates that 20 per cent of last year’s cottage country sales were by owners who decided to cash out rather than abide by the new restrictions or deal with the consequences of non-compliance. She stresses that not all hosts are wealthy investors—many rely on short-term rentals to make ends meet. One couple she’s worked with spent the past decade living in a trailer over the summer months so they could use the income made renting out their lakefront home to fund their retirement. But, as the regulations came in and the demand softened, they had to sell.

Then there are those who can ostensibly afford to opt out of renting and are weighing the pros and cons of staying in the game. Jayne McCaw manages a rental portfolio of more than 250 high-end properties, most of them in Muskoka, through her company Jayne’s Luxury Rentals. She also offers a concierge service that includes private chefs, personalized boat tours and curated Muskoka adventures. Her main client base is families who use their cottages for half the summer and then rent them out the rest of the time. Weekly rates start around $8,000 and climb to 10 times that, with a handful of properties renting for more than $16,000 a night in peak season. McCaw and some of her clients are irritated by the rigidity of the licensing framework and the associated costs. Licensing fees in Ontario can range from $750 to $3,000 a year, with the average landing somewhere around $1,250—a big jump from those in British Columbia, which top out at $650, and Quebec, where the maximum is $153. “It’s a cash grab,” says McCaw.

One of the owners she works with in Huntsville spent the entire summer of 2024 at his $30,000-per-week rental. As a result, he didn’t apply for a short-term rental licence—but because the listing stayed up on McCaw’s site, he was fined $684 for advertising without a licence. Despite explanations and protestations from both McCaw and the owner, the township refused to waive the fine. So the owner took his cottage off McCaw’s site, telling her he was no longer going to contribute to local tourism. By vexing owners who rent out their cottages and the people they seek to attract, municipalities may be the ones to suffer most in the long run. A 2020 report found that Muskoka’s ­pre-pandemic seasonal waterfront cottage industry generated about $925 million in economic activity annually—including $80 million in spending from renters.

In March, an Ontario Superior Court judge sided with the Township of Tiny and dismissed the challenge brought by its Responsible Hosts. But declaring the by-law legal hasn’t boosted its popularity. Glen Sloutsky and his group have filed an appeal, arguing that the judge got key facts and legal points wrong. Dan O’Rourke, once the loudest voice in opposition to short-term rentals, is urging council to ease some restrictions. The pandemic-era surge in rentals, he says, has passed, taking with it many of the problems the by-law was meant to fix.

Try telling that to Jacqueline, a Tiny resident who asked that we use only her first name. In 2022, the four-bedroom house next to hers at the northeastern point of the township sold to an out-of-town investor who lives two hours away. Almost immediately, renters began arriving by the carload. Her once-quiet stretch of waterfront became a locus for 20-person parties midweek, backyard bouncy castles, stolen firewood and people wandering onto her dock—or into her home. One time, when her teenage daughter was in the house alone, guests walked in unannounced, mistaking it for their rental. “We’re terrified every time it’s a long weekend,” says Jacqueline.

The by-law has helped only marginally. The 10-person guest cap curbed the largest gatherings, but the owner continues to flout the minimum-stay requirement. In June, one rental group had a raucous two-night stay, and another arrived almost immediately after the first party cleared out. Water safety, one of Jacqueline’s biggest concerns, falls outside the scope of the by-law. In the past, renters have used the host’s boat without a licence, tried to swim to a nearby island and drifted out on floaties into an active boat channel. She’s had to call the OPP marine unit on multiple occasions. When problems arise, Jacqueline reports them, in accordance with Tiny’s recommended protocol. During that rowdy weekend in June, she first tried calling the property’s designated “responsible person”—who’s supposed to be reachable within 30 minutes and on-site within an hour—but got no answer. She then submitted complaints through the township’s online form and by phone, reaching a 24-hour hotline that’s meant to relay concerns to the township and the owner. No one followed up.

Selling is an option. One of Jacqueline’s friends moved after finding herself flanked by rentals, but Jacqueline isn’t ready to leave just yet. To prepare for the onslaught this summer, she set out new No Trespassing signs, planted cedars for added privacy, and hooked up a camera trained on her backyard and dock. “If it was like this before we moved here,” she says, “we never would have bought.” Her neighbour doesn’t seem thrilled either: he’s listed the property at least four times and hasn’t managed to sell.

All this stress tied to short-term rentals has a price—and not just for residents and hosts. The programs created to enforce the regulations are meant to be self-­funding, with licensing fees and fines expected to offset the costs of the staff and resources required to run them. That hasn’t exactly panned out. In 2024, Tiny budgeted nearly $500,000 for short-term rental licensing and enforcement—to cover everything from salaries and legal fees to software and vehicles—and projected $525,000 in revenue from licensing fees. But, with only 177 applications received at $1,750 each, the township was more than $200,000 short. Even after factoring in $12,000 in fines, well below the projected $20,000, the program was deep in the red. This year, Tiny has scaled back its operation, planning to reap $350,000 from 200 licence applications and projecting expenses that are $70,000 lower than last year, mostly due to staffing cuts. But, despite fewer resources and a fall-off in ­infractions—12 in the first quarter of 2025, down from 27 the year before—the township is somehow projecting $80,000 in court-collected fines, an equation that just doesn’t square.

Over the past two decades, many municipalities have adopted a faster and cheaper alternative to by-law fines, which are processed through the legal system and clog up dockets. Administrative monetary penalties, on the other hand, can be issued and collected directly by municipalities, bypassing the courts altogether. Any unpaid amounts are transferred to the property owner’s tax roll and collected as municipal taxes. In 2023, the town of Wainfleet, in the Niagara region, proposed a short-term rental by-law with administrative monetary penalties that started at $1,500 for a first offence. But, during the subsequent discussion, the town’s councillors kept pushing to increase the fines—despite the fact that, according to Ontario’s Municipal Act, these penalties aren’t meant to be punitive. By the time Wainfleet’s licensing by-law came into effect that July, the township had landed on a range of fines so astronomical that enforcement seemed unimaginable: $5,000 to $20,000, per owner, per dwelling, per day.

When Scott and Joanne Wilson bought a lakefront property in Wainfleet in 2021, they knew they would have to occasionally rent it out to offset steep property taxes and their million-dollar mortgage. When Wainfleet’s licensing by-law came into effect, Scott says, owners weren’t given enough notice to complete the permit process in the allotted time. Since he and his family had sold their home in Burlington and planned to live in Wainfleet full time, Scott opted to wind down the rental business. As a gesture of good faith, he emailed the township about his intention to honour some existing bookings. The township took his email as proof of a violation, and over the next five months, the couple was fined more than $90,000 for operating without a licence.

As the Wilsons attempted to untangle how they’d landed in this mess, things got even worse. Earlier this year, one of their listings was inadvertently reactivated on a rental site, and despite the fact that the property couldn’t actually be booked via the platform, the couple was fined another $50,000. When Scott wanted to challenge the fines in court, the township told him he couldn’t appear in court himself. The appeal process for administrative monetary penalties is internal—first through a town staffer, then a paralegal. In June, Wilson was scheduled for a call with a screening officer to contest part of the most recent fines—$30,000—but he was unable to reach them due to spotty lakeside cell service. Less than an hour later, he received an email stating that, due to his failure to attend, the fines were upheld and no further review was possible. The Wilsons now owe, with interest and penalties, more than $200,000. A chunk of that sum has already been added to their property taxes. They asked Wainfleet to separate their fines from their base tax amount, but the township ignored the request. The couple fears that any payment they make will go toward the fines first and will be taken as an admission of guilt. Meanwhile, their outstanding tax bill has rendered them ineligible to renew or renegotiate their mortgage, putting their ownership at risk.

Letters sent by the Township of Wainfleet to the Wilsons state that unpaid fines may be collected “in the same manner as property taxes,” meaning their home could eventually be treated as tax-delinquent, opening the door to late fees, interest and even a tax sale. The township did not respond to multiple interview requests, but in a statement released in October of last year, it denied pursuing the seizure or sale of any properties related to short-term rentals. In that same statement, the town also said it doesn’t apply fines on a per-day basis, but its correspondence with the Wilsons warns of “daily penalties for up to 12 months.” Scott is now suing, alongside 11 other property owners, to overturn the by-law. He’s optimistic that the court will quash the fines and is hopeful that the township will be forced to cover legal fees and damages. But he also knows that the expense of a protracted legal fight will ultimately be shouldered by Wainfleet’s tax­payers. “Even if we win, we’ll end up getting punished,” he says.

Monster fines and other outsized tactics employed by these municipalities paint a picture of a crisis that is spiralling out of control, but the reality is usually much more subdued. Late last year, Peter Lavoie of Oro-Medonte’s Good Neighbours group conceded that there were just a handful of truly disruptive properties in the area. In Tiny, six addresses—three licensed, three unlicensed—accounted for a third of all complaints in 2024, and 87 per cent of licensed rentals had no complaints at all. What, then, is being regulated so aggressively? In housing-strapped cities, these rules are often about preserving long-term housing. In cottage country, they tend to target noise and crowding. But the townships pushing them also seem concerned that, with this new influx of urban buyers into small-town markets, something more intangible is under threat: a long-standing notion of who belongs in the community and who doesn’t.

One Toronto couple I spoke to moved to Oro-Medonte in 2021 and applied to the township to convert their basement into an apartment, first as a rental but eventually as a suite for their parents or children. Their proposal aligned with the province’s housing goals and the township’s official plan, plus similar applications had been approved without question. But this one, from a family of colour, sparked a fierce backlash. According to one of the applicants and a town councillor who served at the time, a representative from the Horseshoe Valley Property Owners Association urged locals to object. More than two dozen residents submitted complaints. Some raised fears about density and noise. Others were more explicit, warning that renters wouldn’t respect the area’s tranquility, that the change would “set a precedent” and that “newcomers”—often a euphemism for ­immigrants—would cram “8, 10, 12 residents” into a single-family home. “We’re going to have a character change in that community,” said Ian Veitch, a councillor and former vice-president of the Property Owners Association, who predicted rentals could “mushroom” and “turn into something which may not be wholesome” for the township’s “natural rural paradise.” (Veitch did not respond to requests for comment.) The couple’s application was ultimately denied, but a similar one was approved at the following meeting.

When the couple appealed the decision to the Ontario Land Tribunal, the township bowed out, saying it wouldn’t fight them, but the Property Owners Association refused to back down and hired a lawyer. Though the couple eventually won a scaled-back approval, just as they prepared to move forward, the township brought up a square-footage restriction that hadn’t previously been applied. Fed up, the couple decided not to build and began to wonder if they would ever feel comfortable in the neighbourhood. In 2022, needing a break, they left on a short vacation and rented their home out on Airbnb. Neighbours went ballistic. They posted photos of the couple’s home, address included, on Facebook, accusing guests of partying. Some crept into the yard to photograph licence plates; others tried to get the listing taken off Airbnb. On the couple’s return, one neighbour was caught peeping into their car, leading to an altercation that almost got physical. The police were called, and neighbours falsely accused the applicant of beating his wife. The hostility, the applicant claims, wasn’t about parking or square footage or zoning. “We believe we were stereotyped because of our race,” he says.

Much of the debate around short-term rentals hinges on the perceived difference between traditional renters—families who return summer after summer, often renting from the same owner—and this new generation that books via platforms, with no ties to the community. By-laws in Muskoka Lakes, Georgian Bay, Northern Bruce Peninsula and Oro-Medonte all cite a need to protect the “character” of the community. The 2019 survey conducted in Tiny flagged concerns about renters taking over a beach. One Oro-Medonte resident complained about individuals with “limited language skills.” In Gravenhurst, an official infographic listing the top short-term-rental concerns includes a black silhouette simply labelled “unknown people.”

“Renting your property here, and this is probably controversial, it’s a privilege,” Muskoka Lakes Mayor Peter Kelley told the CBC last year. But protecting that privilege too aggressively can cross into bigotry. Jayne McCaw, the owner of Jayne’s Luxury Rentals, has heard from property owners who get complaints only when their guests aren’t white as well as non-white renters who say they’re treated with suspicion. Officially, cottage country’s short-term-rental rules focus on managing behaviours through guest caps, minimum stays and noise restrictions. But the way these regulations are enforced often targets unfamiliar faces and people who look like they don’t quite fit. The profile of the typical renter is shifting, and townships need to get over it. McCaw, for example, estimates that about a quarter of her booking inquiries are from non-white guests. And as Ontarians of all kinds seek out the aspirational Canadian experience of going to the cottage, that number is only going to grow.

This story appears in the August 2025 issue of Toronto Life magazine. To subscribe, click here. To purchase single issues, click here.