Between Wagmatcook and the next town, Whycocomagh, this welcoming hostel is a good budget base, although at 30km southwest of Baddeck, it's hard to get to without your own wheels – a drawback for backpackers. Still, once you get here you'll find pleasant dorms and private rooms, with a large deck, a good kitchen and free local calls.
Bear on the Lake Guesthouse
Cape Breton Island