The Monster Cottages vs. the Resistance

The old sanatorium looms high above the sheltered waters of Cliff Bay on Lake Muskoka, a few kilometres north of Gravenhurst. Flanked by a screen of pine trees, the hulking structure operated first as a Victorian-era tuberculosis treatment centre and then, starting in the 1960s, as a care facility for people with intellectual disabilities. For the past 30 years, the property—owned by the province and officially known as the Muskoka Regional Centre—has been left to moulder, disturbed only by the occasional daredevil drawn in by tales of a haunted asylum.

The centre, however, is not just old buildings and ghost stories. Sitting on more than 70 acres of land, it has some 2,000 metres of coveted ­shoreline—almost unheard of in an area that has attracted moneyed urbanites in search of R&R since the 1860s. In recent years, Infrastructure Ontario made several attempts to sell the property, which, despite its prime location, wasn’t simple—the purchase came with a long list of conditions, including paying in full up front and presenting a viable business plan. In 2020, the province sent out a confidential memo to a select group of prospective buyers, advertising a “once-in-a-lifetime opportunity,” list price not included. Though the vast majority of the property is zoned as institutional, amendments could be made for the right business plan, the province promised. Purely residential use was a no-go, but developments that created jobs for the town would be looked upon favourably.

By 2023, the government had its winning bid, though the offer price was never divulged. The buyer was a real estate developer created for the bid called Cliff Bay Muskoka Corporation, a subsidiary of the investment firm KS Group. Pending a minister’s zoning order, known as an MZO, the company would be free to transform the property into a luxury resort and spa. The proposal was unabashedly bold in its ambition: two hotels, more than 1,000 condos, a two-storey spa, two restaurants, a wedding venue, a four-storey parking garage, an 80-slip marina and a couple of beaches. It also included some 50 lakeside villas, jutting out over the water on their own private piers. It would be the largest development in Muskoka’s history, and it seemed more like an all-inclusive in Turks and Caicos than a lakeside retreat off Highway 11.

When Cliff Bay’s project became public in the spring of 2025, nearby property owners were horrified. Some of the proposed buildings were as high as six storeys, more suited to a city than to cottage country, says Bruce Parlette, who owns a six-bedroom timber-frame cottage on the bay. “The ones at the back are 30 feet up on land, so they’re close to 100 feet off the water,” he says. “If you were in a fishing boat or in a canoe down in the water looking up at all these tall buildings, you’d feel like you were paddling along Queens Quay in Toronto.”

The list of grievances didn’t stop there. The parking for 2,500 vehicles was a problem because the property sits at the end of a one-lane road—how much more bumper-to-bumper weekend traffic can one area be expected to handle? The lake was already maxed out for salt content due to de-icing runoff from road maintenance. But, more than anything, it was the project’s overwhelming density that spelled disaster, says Parlette. At full capacity, the new resort would be able to host thousands of visitors at a time. Gravenhurst, which has a year-round population of 14,000, already struggles to accommodate its seasonal influx of 11,000 cottagers.

In order to build villas and restaurants over the water, Cliff Bay would also need to purchase or lease part of the lakebed itself, which is Crown land. That type of development is carefully controlled by local by-laws, both to protect the fragile shoreline and because of the significant flooding risk. In 2019, Muskoka was hit by the worst flooding to date, and it was walloped again this past spring. So each township has strict rules about how far from the water cottages can be built, usually limiting development at around 18 to 30 metres from the shore. But most of those setbacks weren’t in play for the Cliff Bay proposal. If the MZO is approved, it could allow the developer to circumvent local planning.

As required by the provincial government, Cliff Bay held an online public consultation a few weeks after the project was announced. The meeting did little to lower the temperature. The company didn’t use a paid Zoom account, so the number of attendees was capped at 100. Many residents—and some of the project’s ­administrators—couldn’t get into the forum. After Cliff Bay’s planner apologized for the debacle, the meeting was rescheduled for July.

By that time, several attendees had already seen enough. Parlette started a petition to halt the MZO. Lawn signs were distributed, including one that read, “Act now, before the Muskoka you love becomes the Muskoka you left.” Residents started digging to find out what they could about the project, but information was scarce. Because the sale was going through the province instead of the township and was subject to an MZO instead of the usual municipal project approval, a lot of the documentation wasn’t readily available.

Cliff Bay’s website did have a list of people involved in the project, including some established names in the industry such as Hunter ­Milborne of the Milborne Group, a condominium broker in Canada, and Marcus Gillam of the Gillam Group, which oversaw construction on Evergreen Brick Works. But the project’s lead, Kirill ­Soloviev, was an unknown quantity. There was little about him online, and he had no obvious connections to the construction, hospitality or tourism industries. When pressed about his qualifications during the public consultations, he responded simply that his resumé had been vetted by the province but was under an NDA. When I spoke with him this past April, he said, “I’m a private person. Aside from this project, I have other ones that have been delivered and that are in progress, some of them even of a larger scale.” He gave no further details.

Concerned locals are unwilling to trust Infrastructure Ontario’s vetting process, especially after the government granted a 95-year lease to the Therme Group—a Vienna-based company with a less-than-stellar track record, according to a New York Times investigation—to build a luxury spa at Ontario Place. Soloviev’s reticence to engage hasn’t helped. The Muskoka Lakes Association, a group founded in 1894 that now represents roughly 20,000 residents, raised red flags over the project’s environmental impact, density and effect on the area’s character. It has lobbied Premier Doug Ford and other government officials to reject the MZO and scale back the development. The proposed construction, which could take up to eight years, would involve levels of blasting never before experienced on the bay. The side effects of the build, they contend, could last much longer.

Despite the project’s unprecedented scope, what’s happening at Cliff Bay isn’t new. It’s simply the most recent battle in a long campaign being waged across the region: the OG cottagers versus the ­billionaires; the developers versus the townships; the locals versus the “citiots.” The different camps have wildly dissimilar ideas of whom cottage country is for and what it should be. For some, preserving the environment is a top priority; for others, spending millions on a piece of paradise entitles them to do whatever they want with it. But the truth is that the old Muskoka, with its classic wooden boats, pristine lakes and vast forests, is an increasingly endangered species. Soon, there may not be anything left to fight over.

There are 1,600 lakes in Muskoka, but for the wealthy and well connected, there are just three: Muskoka, Rosseau and Joseph. In the 1930s, Rockefellers, Carnegies and Mellons all built vacation homes on them; present-day residents of Lake Joe’s so-called Billionaires’ Row include Colliers CEO Jay Hennick, former Magna CEO Don Walker, Robert Herjavec of Dragons’ Den and former NHL defenceman Paul Coffey. Over the past few years, the builds have gotten exponentially bigger, more audacious and—in the instances where they look like steel-and-glass car dealerships airlifted from Etobicoke—glaringly out of step with their surroundings. Muskoka’s traditional pitched roofs, clapboard siding and cedar shakes, which are cloistered by trees and follow the contours of the granite outcrops, complement the setting rather than dominate it.

Single properties are now selling for tens of millions of dollars, and whole islands are being transformed into $30-million compounds. For these affluent few, spending time up north has gradually become less about communing with nature and more about ramping up the creature comforts of home. In the past five years, the degree of leisure-maxxing has become extreme: new builds feature helicopter garages with extendable landing pads that slide out over the lake or boathouses that double as miniature sports bars; indoor-outdoor sound systems are equipped with speakers disguised as rocks to keep the party going over the whole property.

One of the area’s most opulent cottages isn’t a cottage at all. Nicknamed Château du Lac, the $23-million mansion is owned by trucking magnate Tom Della Maestra and designed by Ferris Rafauli, best known for doing Drake’s Bridle Path residence. Perched above Lake Rosseau, the property comes with basketball and tennis courts, parking for 14, an infinity pool and hot tub, a 12-metre-long Italian chandelier, a laundry room on every level, and much more. What it doesn’t have is a boathouse. During construction, when the build exceeded the lot coverage allowance, Seguin Township withheld building permits. So Della Maestra applied for a zoning variance, prompting strenuous objections from more than 40 of his neighbours. While the township ultimately compromised on the over-build, in return it ruled that no current or future owner would be permitted to have a boathouse—a major concession for any owner in Muskoka, where partying down by the dock is half the fun. Della Maestra has repeatedly requested that the decision be overturned, without success.

There are strict rules regarding how, what and where you can build in Muskoka. By-laws control not only how close to the water construction can start but also how many trees can be felled and what the footprint of a building can be—measures designed to manage density, preserve old-growth forests and prevent erosion at the water’s edge. These rules are the result of decades of advocacy by local environmental groups such as the Muskoka Lakes Association, which have pushed for regulations on everything from septic systems to combatting acid rain. But the fines that come with violating the by-laws aren’t much of a deterrent to billionaires. For this story, I spoke with several people working in construction in Muskoka who asked to remain anonymous for fear of reprisal. They all know residents who circumvented regulations to make their dream homes a reality.

For some, that meant elaborate subterfuge. One contractor told me about a sprawling cottage on Lake Joe whose owners wanted a roughly 1,200-square-foot basement to house a dance studio, a gym and a second laundry room—add-ons that would have exceeded the “usable space” allotted for the build. When the owners learned that storage space didn’t factor into the calculation, they had the basement wired and plumbed. Then they installed a drop ceiling to transform the entire lower level into a crawl space. Once the building inspector signed off on an occupancy permit, the ceiling was removed and the basement was finished. The Pelotons were wheeled in, and everyone carried on as if nothing had happened.

Other cottagers turn to creative interpretations of by-laws to get their way. Fully functional second dwellings aren’t allowed on waterfront properties, so some cottages come with lavish “storage buildings” that eventually house family members, guests or personal staff away from the main building. (One builder told me about a 2,400-square-foot “boathouse” without a single boat slip in it.) Then there’s the airborne component. Cottage country has its share of small-aircraft pilots who take to the skies to avoid Friday-night gridlock on the 400. Because their boathouses and docks are registered as aerodromes with Transport Canada, these mini airports are under federal—not local—jurisdiction. This quirk of bureaucracy has allowed property owners to register their outbuildings as aerodromes and then build structures that might have otherwise been struck down by local by-laws.

The volume of suspicious registrations has been dogging permit officers for decades. One of the more egregious examples occurred in 2008, when a developer named Paul Bak was denied a building permit for a boathouse because of environmental protections. He built it anyway, then applied to have the boathouse registered as an aerodrome despite the fact that he didn’t own a plane or have a pilot’s licence. The township took Bak to court, and he was ordered to remove the building. Rather than demolish it, he loaded it onto a barge and floated it through the locks for relocation to a different property on Lake Muskoka that wasn’t under the same environmental protections. Fifteen years later, a resident in Armour Township, north of Huntsville, used the aerodrome designation to build a 2,340-square-foot mega-dock. Although that resident actually is a registered pilot, locals accused him of using the designation as a workaround. The township appealed to Transport Canada to change its rules regarding what constitutes an aerodrome, but those have yet to be updated.

Demolition orders, like the one handed down to Bak, are rarely doled out for by-law violations. Instead, townships tend to opt for fines, which the owners, given the alternative, are happy to pay. Muskoka’s granite slopes, the very feature that lends the area its charm, are hell to build on. Carving out a flat spot for a cottage requires jackhammering and blasting, and the bigger the place, the more dynamite you need. Swallowing a $50,000 fine for falling short of setback requirements is cheaper than blowing up the rock required to move everything farther away from the water. Some owners consider fines part of the cost of doing business: rather than acting as a deterrent, they are seen as a licence to proceed.

Rule-bending and -breaking peaked during the pandemic, when permits were scarce and site inspections even more so. For many Muskokans, Sugarloaf Island became the ghastly manifestation of this new attitude. The small, oblong island near the opening of Foot’s Bay in Lake Joseph was dotted with a few cottages when Toronto real estate developer Joe Azouri bought one of them for $3.2 million in 2020. He had plans to renovate the existing building and add a new wing that would more than double the square ­footage, creating the perfect getaway for his young family. To get it done, his workers blasted the property, removed swaths of trees and created access roads for heavy machinery.

As with most developments in the area, the blasting happened in winter, when no one was around. When neighbouring cottagers returned in the spring, they were shocked by the changes to the island. Roger Oatley, a retired lawyer with a residence nearby, took pictures of the site and started an online petition calling for the township to stop the work. Local by-law enforcement eventually charged Azouri and his contractors with violating tree conservation and site alteration by-laws, for which they faced fines of up to $320,000. One contractor was ultimately convicted, but the charges against Azouri were later withdrawn, and the damage was already done.

Trying to regain some semblance of control, the Township of Muskoka Lakes more than doubled its by-law ­enforcement—which wasn’t saying much: staffing increased from one full-time officer to two, plus a couple of students during the summer. In June of 2021, then-mayor Phil Harding posted a video on the township’s YouTube channel announcing the change: “Be aware, they are out there, days, nights and weekends.” With a pristine chainsaw sitting on his desk, Harding proclaimed, “If you break our by-laws, you will be prosecuted. Full stop.”

The tough-guy stance ultimately failed: Harding ran for re-election in 2022 but lost to councillor Peter Kelley, a retired corporate lawyer and commercial finance executive. After spending 23 years as a seasonal cottager on Lake Joseph, Kelley had relocated to Muskoka full time with his family. Living in Port Carling in winter radically changed his perspective. Despite the busy summers, work and money were scarce in the off season. Locals could no longer afford housing in town and were forced to move farther out. “I find it fascinating to stand on the corner of Bailey Street and Highway 118 at 7:30 a.m. and count the number of pickup trucks coming to jobs here,” he says. “Those workers don’t live here. At the end of the day, you see the same 400 trucks going back in the other direction.”

Kelley ran for office—first as a councillor in 2018 and then as mayor—on a back-to-Muskoka platform. One of his goals was to address the size of the fines handed out for building infractions. “People who build a $20-­million cottage aren’t worried about a $200 fine for cutting down a tree,” says Kelley. “They spend more than that on napkins for their grand opening.” Within seven months of his election, the township allowed for higher individual fines—starting at $2,000—and gave by-law officers the ability to lay charges that would be handled in-house rather than get slowed down in provincial court.

Fines may be higher, but handing them out hasn’t gotten any easier. Cottages frequently sit at the ends of winding driveways, shielded from the road by rock cuts and dense tree cover. Often, the only way to properly see what’s going on is from the water. But that becomes unrealistic with hundreds of lakes to monitor—especially when the by-law officers have just one boat, which they share with building inspectors and other municipal staff. Aside from scheduled inspections, which give owners ample time to obfuscate, it’s nearly impossible to regulate development in person.

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Trying to regain some control, the Township of Muskoka Lakes more than doubled its by-law enforcement—from one full-time officer to two, plus a couple of students during the summer

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To get around these topographical challenges, the township has turned to two readily available fonts of information: the internet and gossip. Online real estate listings double as a handy directory for by-law officers looking to ferret out infractions. Realtors frequently post properties on social media, giving looky-loos and potential buyers access to glossy photographs and full video walkthroughs. Because these listings tend to highlight selling points that are restricted by local regulations—hot tubs on docks, boathouse bars, extra buildings for staff—by-law officers can tackle enforcement without leaving the office. The township’s main source of intel, however, is angry neighbours. In 2025, just 22 per cent of its enforcement activity was pro­active; the vast majority stemmed from residents filing complaints.

The devastation of Sugarloaf was a tipping point. Oatley’s petition, complete with a drone photo that showed the damage in detail, made it impossible to ignore. Ed Boutilier, a photographer and videographer with a cottage nearby, spends much of his time cruising the lakes on his boat or Sea-Doo, documenting the area. He posts the best stuff on social media: clips of historic cottages, with tidbits about the properties’ legacies, and the massive steel-and-glass creations rapidly replacing them. He’s noticed an uptick in cottagers who arrive by helicopter—as well as an uptick in local rage. But he’s conflicted about who’s in the right. “That’s their version of Muskoka. So should we be criticizing them? I don’t know,” he says. “But they’re there. And there’s a lot of them coming.”

In October of 2024, while tooling around on his Sea-Doo, Boutilier took a video of a particularly beautiful stretch of shoreline. In it, a ridge of land is seen rising from the edge of the lake, the flaming fall leaves contrasted by dark evergreens. There’s an A-frame boathouse with two slips, painted hunter green to help it blend into the forest. It matches the modest cottage, which sits a few metres back from the water’s edge. The effect is charming, bucolic—quintessential old Muskoka. When Boutilier returned to the area last summer, the boathouse was still there, but where the cottage once sat was a huge crater. A few lonely pines remained, clinging to the earth alongside the rubble. Switchback roads cut up the slope, harsh zigzags digging into cascades of sand and gravel.

Boutilier wasn’t the only one to notice what had happened: several people reached out to ask what he knew about the property. Boutilier, who says he generally tries to avoid getting into complaint disputes, contacted the township’s by-law enforcement to ask for more information. He wondered if the blasting and tree removal went beyond what was allowed. But the township told him the site was mostly in compliance with the building permit and the owner’s rights to develop the land. The only thing out of order was a missing silt barrier to keep the blasted debris from polluting the water, and it was later added.

These days, Boutilier gets 10 to 20 messages a week from residents wondering about the legality of this construction site or that new cottage. Local online groups are full of pictures of build sites, scarred stretches of shoreline with concrete foundations at their centre. Occasionally, property owners pop in to defend themselves against accusations of wrongdoing. By-law enforcement cases may be up roughly 25 per cent in the last five years, but the neighbourhood-watch approach that led to them has its drawbacks. Compliant builds can get tangled up in the fervour to catch violators, a kind of cottage-­country Crucible.

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“People who build a $20-million cottage aren’t worried about a $200 fine for cutting down a tree. They spend more than that on napkins for their grand opening,” says Muskoka Lakes mayor Peter Kelley

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Boutilier sees himself as more of an archivist than an activist, someone who uses his expeditions on the water to document a Muskoka in transition. But there are many others who read up on the by-laws and then take to the lakes to gather evidence, building cases like vigilante PIs. Their complaints are technically anonymous, but with few neighbours around, it isn’t hard for property owners to figure out who sent the by-law officers knocking, which can make for awkward encounters. If a site under investigation is on an island, ­officers—who don’t always have access to their one shared boat—may have to rely on nearby residents or even complainants to give them a lift to the property in question.

Pockets are deep on the big three lakes, and disputes have a tendency to get litigious. In 2024, Lenore Inniss, a freelance marketing professional who works with environmental groups in Muskoka, got a tip: JW Marriott the Rosseau, a luxury resort in Minett, at the north end of Lake Rosseau, was planning to host a 20,000-person concert series. The resort’s owner, Michael DiCienzo, had begun advertising the event but had apparently neglected to clear it with the township. More remarkably, the resort had begun felling trees in the middle of the night to prepare the site. And there were significant logistical concerns beyond tree removal under the cover of darkness. The only road into Minett from the south uses a one-way bridge, which drivers in each direction must take turns crossing. Thousands of cars on the bridge would snarl traffic for kilometres and make it difficult for emergency services, including an already overextended group of volunteer ­firefighters, to access the area.

Incensed, Inniss shot drone footage of the work being done and made an Insta­gram post about the venue. A few days later, Inniss and a co-worker were served trespassing notices: if they set foot on the resort’s property, they would be charged.

Townships around Muskoka are scrambling to rectify years of lax policing, but they’re struggling to get anything to stick. When by-law enforcement does happen, the townships can face protracted legal battles, with appeals often escalating to the Ontario Land Tribunal. Since 2014, when the by-laws were modernized, there has been a ban on what are known as ground-floor recreation spaces—basically, boathouses that are more man caves than places to store kayaks and Boston Whalers. One owner I spoke with added a couple of couches and a TV to his boathouse so his family could have a place to relax out of the sun. There didn’t seem to be much harm, he reasoned: these sorts of spaces were common, and fines were rare. But, when by-law officers dropped by unexpectedly, they charged him and his wife $10,000 each. The owner disputed the charge and eventually settled for $1,500. He wonders how the township can afford to keep fighting these fights when, “in a lot of cases, the very wealthy people take this process to the nth degree.”

According to Mayor Kelley, the township has to go case by case. “Sometimes there’s a judgment call that needs to be exercised about whether the cost of pursuing compliance far outweighs the value of getting it,” he says. In 2021, a group of residents and business owners—including some of the area’s largest builders and real estate agents—started Our Muskoka Stakeholders Association to advocate for the rights of property owners. One of the group’s founding members, Jason Sifft, the president of Muskoka Lumber, says that the township picks and chooses whom it pursues for enforcement based on whether it can win the case. According to Sifft, the township generally avoids charging the richest owners because of their ability to draw out appeals and drag cases through the land tribunal, which costs the government a prohibitive amount of time and money. Instead, he says, the township often settles out of court with NDAs so that cases don’t set precedents other owners can later use to also circumvent by-laws.

A few years ago, the township considered folding and allowing boathouse lounges rather than continuing to fight a ubiquitous violation of a by-law that is open to creative interpretation. Some residents passed off the kitchen­ettes in their boathouses as fish-cleaning stations. Others claimed that the TVs and sound systems were related to boating—the screens were for monitoring weather conditions, the speakers for listening to marine reports. It’s difficult to prove otherwise, but at the same time, the by-law exists for a reason: light and sound travel easily over water, making sound systems and TVs much more disruptive in boathouses than they would be on land.

The issue came to a head during a scheduled review of the township’s official plan in 2022. Every five to 10 years, the plan gets updated with fresh policies and goals for the growth of the township, which guide the council in updating and enforcing by-laws. The plan shapes rules about development, property use and environmental protections—it decides what will be built, or not, in the area. Several of the founders of Our Muskoka were initially involved in the plan review process, sitting in on special committee meetings and providing input. But the collaboration started to dissolve when they repeatedly clashed with lake associations and environmental groups over what the rules should be.

The official plan was approved in 2023 after a long consultation process, but Our Muskoka appealed large sections, especially policies related to the waterfront and natural heritage, saying they were overly restrictive and outside the scope of the municipality’s planning authority. One of the group’s founders, a realtor and builder named Bob Clarke, says they appealed because the plan review wasn’t a fair process. Compromises would be reached in one meeting, then reversed by the next, with changes pushed through at the last minute. Our Muskoka’s members insist that they aren’t anti-­environment; they just want property owners to be able to use and build on their land without undue interference from the municipality. Their stance throughout the official plan review was that there needed to be reasonable compromise between conservation and development.

“We’re not looking to cut down all the trees in Muskoka, or blast all the rock, or put down white-sand beaches,” says Clarke. “We’re looking to find a balance between what people want. It’s true that a lot of extremely wealthy people want their summer residences to have the same features as their places in the city, like­ golf simulators and home theatres. But half the people on the Muskoka Lakes Association who are complaining about those things are also rich. It’s just that they already have everything they want.” He sees their environmentalism as thinly veiled NIMBY­ism from nostalgic cottagers clinging to the past. “They’re trying to define how people need to behave and operate within Muskoka,” he says.

On the flip side, members of the Muskoka Lakes Association say they’re not anti-­development, just that development must be done responsibly to protect the environment. Ken Pearce, the association’s president and a retired corporate and securities lawyer, says that some of the waterfront policies under appeal have been around for decades and are essential to preserving the area. “There have to be rules and limits, otherwise people are going to build whatever they want and as much as they want,” he cautions. Pearce tells anyone who will listen that, in Muskoka, the environment is the economy: the reason the area has attracted so much wealth in the first place is its pristine lakes and forests and rocks. If they disappear, so will everything that makes the place special.

As it stands, there’s not much of Muskoka left to build on. The easily developed properties have been snatched up, and what remains of the available waterfront has big cliffs that would require blasting or marshland that would need to be filled in. To free up more space, Our Muskoka has appealed policies tied to minimum lot size, waterfront setbacks, environmental protections and lot coverage. Clarke says he’s partly fighting for people who can no longer sell their existing small lots as stand-alone pieces of land or who were planning to divide their property into parcels for their kids. The Muskoka Lakes Association, meanwhile, wants to remind everyone that repealing the minimum lot size and increasing how much of a property can be developed would mean more density. “The waterfront would look very different,” says Pearce. “There wouldn’t be trees and there wouldn’t be rock. It would just be buildings.”

Until one side relents, the Muskoka Lakes Association and Our Muskoka will be stuck in this tug of war. After the Muskoka Lakes Association succeeded in its 2025 motion to dismiss Our Muskoka’s appeal of the official plan, Our Muskoka appealed again, to the Ontario Land Tribunal. The Muskoka Lakes Association fought back, and the motion was dismissed this past March. After three years of appeals, Our Muskoka is working toward another turn in divisional court.

Clarke says Our Muskoka would like to see the township enforce its by-laws equally and fairly. Most of his group’s board members were hit with by-law charges during the appeal process, he says, many for things that have been on their properties for years or for rules that have been rarely enforced. The founders believe they’re being targeted by complaints from people on the other side of the official plan debate. One member has spotted people boating by his lot slowly, then speeding up when they notice him. He assumes they’re taking photos, looking for by-law violations. They want Muskoka to be what it was 50 or 60 years ago, he says, but that’s impossible. “Almost every boathouse you go to now has a lower lounge. It’s clear what constituents want.”

There’s no denying that the township is having trouble curbing development, but Mayor Kelley is determined to try. “It’s obvious to most people who have been here 20 years that things aren’t changing for the better,” he says. “They’ve been changing to suit a different taste and a different use. And that’s probably been more destructive of the environment than anybody realized.”

Kirill Soloviev, Cliff Bay’s CEO, doesn’t see his proposed development as counter to the spirit of old Muskoka. If anything, he’s all for democratization. “We didn’t make it as a gated community,” he says. The condos would have the potential to be in a rental pool, allowing people who would otherwise be priced out of the area to at least visit, and the main beach would be public.

The proposal also puts a heavy emphasis on job creation, in keeping with the township’s call for bids. The median income in Gravenhurst is around six per cent below the provincial average, and employment rates are seven per cent lower. Meanwhile, second homes make up 44 per cent of the district of Muskoka’s households, and the seasonal population of 84,400 residents exceeds full-timers by almost 20,000. In the past, the area was able to rely on more stable industries, first with logging and later as a hub for wooden boat construction. But, as boat-building receded, tourism took over as the dominant industry. Now, the district’s economy is inextricably linked with the cottaging industry, with retail and construction as its biggest employers.

According to the township, the construction industry in Muskoka Lakes brought in more than $170 million in 2025. Clarke says that, when local businesses decline work that’s against the rules, cottagers often just hire contractors from the city who don’t have a reputation to maintain in the area. In some cases, Muskoka contractors have reached agreements with their clients: if any fines are incurred for work that violates by-laws, the money won’t be coming out of the contractor’s pocket.

The local economy’s reliance on seasonal visitors is precarious at best. The season itself is short, from Victoria Day weekend to Thanksgiving. Soloviev says that his resort and spa will be open all four seasons, which would bring jobs to the area year round. But many locals wonder whether those jobs will actually materialize in the off seasons: there may not be enough tourists willing to brave icy highways for a winter getaway on a frozen lake to justify significant year-round staffing.

Despite the doubts, reservations and pushback from locals, there’s been no word from the province about halting the project. The MZO is with the Ministry of Municipal Affairs and Housing for approval. If it makes it through, Cliff Bay will be cleared to finalize the purchase and begin the first phase of development. The company has gone through several rounds of revisions to its plans, taking into account the feedback from the Muskoka Lakes Association and the public consultations. ­Soloviev estimates that the planned development is now about a third of its original size. The process is far from over, and that suits some Muskokans just fine. They have no intention of backing down from a fight. They’ve been here for decades. They’re not going anywhere.

This story appears in the July 2026 issue of Toronto Life magazine. To subscribe, click here. To purchase single issues, click here.