Caption: Huntsville and Lake of Bays Railway No. 1, a 1926 MLW coal-fired 3'6'' gauge 0-4-0 saddle tank engine "The Portage Flyer", is posed beside its station in Huntsville, 2 days after the heritage railway officially opened on 1 July 2000.

Waterways used to be primary transportation corridors in Muskoka. The original route of the narrow gauge railway, completed 1904, portaged the short distance between Lake of Bays and Peninsula Lake - the terrain and 100 foot water level difference making a canal uneconomic. The rail route of just over a mile was also challenging, with steep grades, tight curves and a switchback.

By 1959 transportation changes had made the railway unprofitable, and it was shut down. The track, engines, and equipment were sold privately and used to build and operate Pinafore Park RR in St Thomas, Ontario.
Around 1985 the steam engines (at least) were sold to a group of enthusiasts who were the nucleus of the Huntsville and Lake of Bays Railway Society.
In 1993 the H & LoB Railway Society agreed with other organizations to establish Muskoka Heritage Place, with a new 1 km railway route to be built in Huntsville Memorial Park, and the construction of an engine house, station, acquisition/refurbishment of material and equipment, etc.

More history and background at portageflyer org website, though operational info was outdated.
Historic maps and pictures at railwaypages the-portage-flyer and trainweb oldtimetrains
Schedule information is at muskokaheritageplace ca website - I would contact them to verify before visiting.
Be aware that diesel locomotive No. 3 powers a lot of their trains.
Caption has been revised after comment, thank you.