In 1827 the town of Lindsay was founded by a Mr. William Purdy, and his sons Jesse and Hazard. The town was first known as "Purdy's Mills". Purdy built the first dam in the winter of 1827 to power his grist mill. The dam was 10 feet high, and located on the Scugog River, at Lindsay

The dam flooded the area near Port Perry, creating a lake. Many Port Perry settlers were furious as the dam was flooding the land they had worked so hard to clear. In 1828 the dam broke due to spring flooding, and was rebuilt in 1830. A fever ran through the area. People blamed it on the growing number of mosquitoes that populated the new lake, which was becoming stagnant because the water could not flow.

Some of the farmers gathered together and marched to the dam armed with axes. The farmers were set on destroying it, and managed to tear down the main part. However, it was rebuilt when the conditions were safe, and Lake Scugog remained.

Today, the lake is no longer used for logging. Many people come for the good fishing and recreation. Even today, the lake is a boon to Port Perry's economy.