Photo / Article Via: Ontario Construction News
The Province of Ontario, through Infrastructure Ontario, has agreed to sell 81.5 acres of the former Muskoka Regional Centre lands in Muskoka Bay, along with adjacent lakebed rights at the south end of Lake Muskoka, to a private developer proposing a large-scale tourism development. The proposed redevelopment would require a minister’s zoning order (MZO) to rezone the site for commercial tourist establishment use, along with residential and open space components.
Under the MZO framework, municipal planning rules would be replaced by provincial direction, removing the need for official plan amendments or zoning approvals from the Town of Gravenhurst or the District of Muskoka.
Critics say the approach would sideline local decision-making and public input.
The proposed development includes up to 1,378 residential and condominium units, up to 10 six-storey buildings, three hotels, two restaurants, a spa, an event centre and a marina with about 80 boat slips. It also includes 33 waterfront villas, some proposed to be built over water.
Opponents have raised concerns about over-water construction, increased boat traffic, shoreline erosion and potential impacts on Lake Muskoka’s ecosystem, including disturbance of lakebed habitat. Current municipal rules generally require shoreline setbacks of about 20 metres, which critics say would be reduced under the proposed plan.
Savethebay.ca, a local advocacy group, has said the proposal would increase density beyond what local infrastructure and services can support, while also raising concerns about water quality, noise, light pollution and long-term impacts on property taxes and public lake access.
The Muskoka Lakes Association (MLA) is also urging Gravenhurst Council and the Ontario government not to approve the massive development as proposed by Cliff Bay Muskoka Corp., part of the KS Group of Companies, in Cliff Bay, Lake Muskoka.
The planned thirty-three villas and two restaurants in the lake, up to ten six-storey buildings, three hotels, almost 1,400 units and 80 boat slips as well as minimal proposed setbacks, public parkland or protection for existing trees will “endanger water quality, the environment and fundamentally alter the character of the South Muskoka area,” said MLA president Ken Pearce. “This proposal will destroy the ‘view from the canoe’ and enjoyment of the lake.
“The province should require resort development that is in keeping with the character of Muskoka. We support responsible development, not overdevelopment.”
Opponents say the proposal:
- disregards local planning, community input, and critical oversight
- is High-density with 1378 units, overwhelming local infrastructure and services
- permits large-scale over water development disrupting aquatic ecosystems
- escalates noise, light, and water pollution
- risks setting a dangerous precedent for reckless development across Ontario’s lakes
The Town of Gravenhurst has not taken a formal position on the development
The developer has described the project as a revitalization of the former institutional site into a mixed-use waterfront destination, saying it would support tourism, economic development and long-term stewardship of the area. At a public information meeting in July 2025, held over Zoom, company representatives said the MZO was included as part of the land sale agreement with the province and is now part of the transaction framework.
The proposal remains under review through the provincial approval process.
“As a supporter of responsible development, but not overdevelopment, I agree with the Muskoka Lakes Association’s position in this letter to you calling for the proposal to conform to Gravenhurst and the District of Muskoka’s zoning and planning standards,” the letter states.
