Yes you need a raffle licence in Ontario but its a good moneymaker. Needs a fair amount of lead-in time though and a   

Another good way to make a few hundred bucks with no overhead is have a mini-auction of donated crafts/art. If you don't have contacts in the local artisan community, find someone who does, and get someone--possibly an actual auctioneer, or just someone with good presentation skills--to run the auction. Keep it to less than 10 items, it should be done in 20 minutes or so. Have it between sets after a quick intermission.

Now me, I know something about booking music in rural Ontario. Get someone with a local following; make sure you get plenty of publicity to that Barrie/Orillia folk music crowd (get it in their e-mail newsletter). Targeted publicity is everything. Also, don't rely on ads: write press releases.

Declan has good advice for you there, don't assume you'll fill all the seats.   Best way to come close is book a headliner who you think will draw, and then COVER YOUR BETS by adding a LOCAL opening act, who will get their own people out, that will bring you an extra 15-20 paying customers if you pick the right one.   

We've worked out a pricing structure for our little Schoolhouse hall, which holds 55 people max. We charge $10 advance, $12/door, half price for youth under 18, (this is a good thing to do and brings a few of em out, not enough to make you feel you're losing money on it). This mid-range price reflects that the people that come aren't necessarily the hard-core music fans who wouldn't think twice about a $20 concert ticket, a lot of them are community members who are more curious or want to be supportive. We pay performers 80% of the door, which usually nets them $300 or so. (A decent paycheque for a single or duo.)

Personally I don't much like the "beg everyone you can find to play 10 minutes for free" approach--obviously it works for some and in some densely-populated areas, but what an organizational headache. I have always preferred going with what you are thinking, book 1 act, maybe 2, pay them decent. (Why shouldn't musicians make a living while helping your cause?) I wouldn't promise quite the sums you're talking about up front though, in a fundraiser you want to be a bit more conservative.   

Bear in mind, you want to start carefully in order to show your organization that you can do this without costing them a bunch of money.

Go fer it.

Willie-O