Ontario cottage owners face a surge in regulation as municipalities roll out STR licensing rules, prompting some to pull listings or even sell. If you rent a cottage in Ontario, here's what’s changing and why you need to act fast.

Get Licensed or Lose Your Cottage Income?

Several Ontario municipalities from Greater Madawaska (Calabogie) to Haliburton County, now require short-term rental or short-term accommodation (STA) licenses even for cottage units rented intermittently. For most owners, the administrative burden and fees on top of existing costs have made rentals untenable.

Meanwhile, motel owners in Calabogie applaud the shift, citing fairness and safety standards. The divide underscores a growing tension between preserving local character and managing risks tied to unregulated short-term rentals.

License Costs vs. Rental Income

• Confusion and cost burden: Licensing fees for short-term rentals in Canada vary drastically depending on the municipality. For example, in Minden Hills, hosts must pay $500 every year, while in Ottawa the fee is only $116 every two years. This inconsistency creates financial strain on some operators, especially small-scale hosts, and makes it difficult to budget for long-term operations.
• Uneven application of rules: Because every city and township sets its own standards, covering everything from zoning limits to safety inspections, hosts face a patchwork of requirements. A host operating legally in one jurisdiction may find that the exact same property would be non-compliant just a few kilometers away. This lack of uniformity not only creates compliance headaches, but also raises questions about fairness and equal treatment across communities.
• Rise of black-market rentals: The high costs and inconsistent regulations are pushing some hosts to avoid registration altogether and operate illegally. These “underground” vacation rentals undermine legitimate operators, reduce transparency, and complicate enforcement for local governments. Municipalities are left chasing non-compliant listings, while law-abiding hosts shoulder the costs of compliance.

Current Licensing Breakdown

Short-term rental rules in Ontario can feel like a patchwork quilt as every municipality drafts its own set of requirements, and no two look the same. For cottage owners and urban hosts alike, this makes compliance confusing, costly, and inconsistent. Here’s a breakdown of what you’ll typically find:

• Municipalities requiring licensing: Many local governments, such as Greater Madawaska, Prince Edward County, Ottawa, and Haliburton County, have implemented mandatory licensing programs. This means you cannot legally operate without first securing a municipal license.
• Common requirements: Most licensing programs come with annual fees ranging from $100 to over $500. Hosts are often required to submit supporting documents, such as septic layout maps, proof of emergency contacts, a signed code of conduct, and evidence of safety compliance (like fire extinguishers and smoke alarms). These rules aim to professionalize the industry but can be burdensome for casual operators.
• Purpose behind the rules: While frustrating for many hosts, municipalities argue these measures are meant to protect community safety (fire and sanitation checks), preserve neighborhood character by reducing noise and party complaints, and manage housing concerns by preventing STRs from overtaking long-term rental supply.

Action Steps for Cottage Hosts

Before enforcement tightens:

1. Check your municipality’s STR or STA licensing requirements.
2. Calculate costs such as licensing fees, paperwork, potential zoning restrictions.
3. Decide whether to rent, comply, or withdraw, especially if usage is infrequent.
4. If continuing to rent, ensure that you gather required documentation (site maps, safety compliance), submit application, and budget for annual renewal.
5. Contact planning staff or recah out to the Lodge Compliance team as rules are still evolving in many areas.

A Patchwork Until Provincial Framework Arrives

Ontario’s short-term rental rules remain fragmented, with each town and county setting its own approach. For example, Central Elgin’s comprehensive licensing program begins January 1, 2026, while Muskoka Lakes plans to roll out its online portal and fee incentives by late 2025.

Until the province issues unified guidance, hosts will need to navigate this patchwork system on their own, staying proactive and informed to remain compliant.

Need help navigating Ontario’s cottage STR rules? You can reach out to confirm local licensing rules, fees, and document requirements, before enforcement impacts your income.

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