It’s no secret that cottage country populations have boomed over the last decade. Between 2016 and 2021, four of Canada’s fastest-growing populations were in rural areas such as Wasaga Beach, Ont., and Collingwood, Ont. More faces means a welcomed bump in business, foot traffic, and tourism for some sleepy cottage towns—and more visitors looking for places to rest their heads. For many folks, this involves a stay at a short-term rental (STR) property. Some are investment properties owned by individuals or corporations, which operate as full-time rental businesses; others are owned by cottagers who occasionally rent out their places to help with things like bills and mortgages.
Justin Charles is a cottager in Rosseau, Ont., who falls into that second category. He’s owned his 500-sq.-ft., two-bedroom lakeside recreational property for 27 years, and has rented it every summer since purchasing it. And for good reason.
“We’ve experienced economically tough times over the years and our cottage has always been there to carry us through,” he says. “In 2008, it was the rental of our cottage that allowed us to keep our home.”
For vacationers such as Mandy Arthurs of Orillia, Ont., who has rented cottages across the province with her family for the past 15 years, it’s places like Justin’s that allow her and her family a taste of the classic Canadian cottage lifestyle.
The premise of short-term rentals in cottage country should be simple, then. Non-cottagers get to spend quality time with friends and family in environments they wouldn’t otherwise be able to experience, and owners collect cash for stays. The reality is anything but. While some vacationers come and go without issue, other groups of careless renters (and absentee owners) mean that those who neighbour STRs could be contending with anything from incessant dog-barking, to folks setting off fireworks (sometimes illegally), to trash being disposed of inappropriately, and other nuisances. (Trust us, we’ve heard it all at CL.) Quiet days by the lake—one of the sacred promises of cottaging—can easily be ruined by a frustrated call to the local bylaw office to report a rule-breaking renter.
Cottage rentals have existed for almost as long as cottaging itself. Though the structures have been around since the 1800s, cottaging proper really exploded in the decades following the Second World War, with word-of-mouth rentals emerging around the 1970s.
“At this time, some people were priced out of cottage ownership, and others were looking for ways to pay off their mortgages,” says Peter Stevens, a professor in the liberal studies department at Humber Polytechnic and a historian specializing in cottage history. “Cottage rentals provided a solution for both.”
Next came independent rental websites and agencies, and, in modern times, cottage renting has only accelerated with global corporations such as Airbnb and VRBO cropping up to claim their piece of the rental-wealth pie. Sure, they’re making loads of money, but they’ve also made it easier for owners to market their places—and for renters to access them. Within seconds you can switch from looking for a cottage on Nova Scotia’s South Shore to browsing for a cabin on British Columbia’s Sunshine Coast. There’s no question the short-term rental industry is a lucrative business for owners and corporations alike, but who’s regulating it?
Therein lies the promise of short-term rental bylaws. These regulations, constructed and enforced by local and/or provincial authorities, are supposed to govern the ever-evolving STR industry. The bylaws have existed in some townships since the mid- to late-2000s, but many municipalities across Canada are now toughening existing ones, creating new ones, or both, in an effort to manage out-of-control rentals, owners, and renters. The catch? Bylaws vary from township to township, city to city, and province to province, resulting in an inconsistent patchwork system of laws all aimed at fighting the same problems.
The City of Kawartha Lakes, for example, has been plagued with rental issues ranging from vandalism to problems with noise and litter for years. “In 2019, we saw our roughly thirty bylaw complaints per year increase to about one hundred and thirty complaints per year,” says Aaron Sloan, the manager of municipal law enforcement and licensing in Kawartha Lakes. The city officially enforced a bylaw in January of 2024 requiring STR owners to obtain city-approved licenses in order to legally operate their rentals. The licensing fee ranges from $150 to $1,500 per year depending on the length of time the person rents out the property, and whether it’s “hosted” (meaning the owner stays on-site) or “un-hosted” (the owner lives elsewhere).
Now, the city is better able to track complaints and tackle problem properties. “Out of the 750 STRs in Kawartha Lakes, we know the complaints received are usually from one group of rentals,” says Sloan. He notes that they’re still collecting data on how the bylaws are managing illegal STRs, plus issues with garbage and other nuisances.
For comparison, in Bracebridge, Ont., STR license applications cost a flat fee of $1,500 per year and require two inspections, which the rental owner is responsible for organizing. Both Kawartha Lakes and Bracebridge have demerit point clauses in their STR bylaws. If the owner or their renters violate open-air burning bylaws, for instance, or building code standards aren’t met, the owner will accrue demerit points that could result in a license suspension. In other areas, such as the Town of the Blue Mountains, Ont., and Canmore, Alta., zoning restrictions disallow short-term rentals in some or all residential neighbourhoods. Rentals in these two towns are permitted in commercial districts.
Justin, the Rosseau cottager, is what many people would call a “good” STR operator. He verifies the identities of his renters, has house rules, and is quick to jump on issues that arise. Once, when his neighbours notified him about a group setting off fireworks, he called the renters immediately to intervene. He now lives in a dwelling nearby to keep an eye on things.
In January of 2025, Justin will be subject to the rules and regulations of the Township of Muskoka Lakes’ new STR bylaw. He’ll have to pay $1,000 per year for his license and will be on the hook for any inspection fees deemed necessary by the township. If Justin’s ’70s-era cottage isn’t up to snuff, he could also have to spend money on upgrades just to keep renting. “I’m worried this is going to be a very expensive experience,” he says.
Muskoka Lakes’ chief municipal law enforcement officer, Robert Kennedy, says the township isn’t trying to make the process too onerous for property owners, but that the regulations are ultimately aimed at keeping the property—and its tenants—safe.
Muskoka Lakes’ short-term rental bylaw says properties that require inspections could be checked by the township’s emergency services department, building division, and bylaw division. In contrast, it stipulates that STRs cannot operate in “a dwelling unit that does not meet the requirements as per the Ontario Building Code.”
A group called Good Neighbours Dysart is protesting the short-term rental bylaw in their area, which they say inadequately addresses the number of “large hotel-like STR commercial businesses” popping up in residential areas in Haliburton and beyond. “These properties can negatively impact the quality of neighbourhoods with the constant turnover of transient visitors,” explains Christine Legge, who is one of the group’s founders. She says they aren’t against STRs, but that the group is concerned about how the bylaw in their area seems to disregard residential zoning restrictions and doesn’t appear to provide additional considerations for occasional rentals.
Ann Christie, a Haliburton, Ont.-area cottager, supports the STR bylaws in her area. For three years, the property next to her and her husband’s cottage operated as an STR. Despite well-intentioned owners, Ann says the cottage was frequently over its four-person capacity (she recalls 11 people once staying on the property), with noisy renters who Ann says trespassed on her property and fished off her dock. She hopes the bylaws will also curb other issues stemming from frequently used rentals such as overrun septic systems and improperly disposed of garbage.
In the end, a deep-seated difference of opinion seems to be at the heart of the STR crisis. Owners of small-scale rental operations want to offer up their places without having to jump through hoops and spend more than they make, big rental corporations want to keep making money, renters want to enjoy cottage life, and neighbouring cottagers often don’t want to deal with any of it. Municipalities and provinces are caught in the middle, grasping at any rule or regulation that will inject some sense of order (and a bit of revenue) into a chaotic rental market that’s chock full of good, bad, and indifferent actors.
So what’s the solution? “With any property or structure, even a shed, you have to comply with the rules,” says Andrew Siegwart, the president and CEO of the Tourism Industry Association of Ontario. “Regulations help ensure things are safe, risk is mitigated, and community harmony is maintained.” And that may be the one thing everyone is fighting for: the preservation of Canadian cottage life. Is the current system of bylaws set up to do that? Time will tell.