Updated October 3, 2026 · DF Property Management
What sub-metering is
Most older Ontario apartment buildings have one bulk electricity meter, with electricity included in the rent. Sub-metering (called suite metering in the Residential Tenancies Act) installs a meter for each unit so each household pays for what it uses. In multi-residential buildings, metering and billing is usually done either by the local electricity distributor or by a unit sub-meter provider (USMP).
Who regulates it
- The Ontario Energy Board (OEB) licenses unit sub-meter providers and enforces the Energy Consumer Protection Act, 2010 and the Unit Sub-Metering Code. The Code sets rules on billing, payments, security deposits, arrears arrangements and disconnections, broadly similar to those for utilities.
- The Residential Tenancies Act, 2006 and O. Reg. 394/10 (Suite Meters and Apportionment of Utility Costs) set the rules for what a landlord must do before shifting electricity costs to tenants.
- Measurement Canada regulates the accuracy of electricity meters used for billing.
The owner, landlord or condominium board decides whether to use the distributor or a licensed USMP. Before signing, check that a provider holds a current OEB licence and read its fees and policies — your tenants will be dealing with them.
New tenants vs. existing tenants
The key distinction:
| New tenancy | Existing tenancy | |
|---|---|---|
| Can the tenant be made responsible for electricity? | Yes, if the lease says so and a suite meter is installed | Only with the tenant's informed, written consent |
| Rent | Set without electricity included | Must be reduced as the regulation requires |
| Disclosure | Lease terms and provider information | Specific information before consent is sought |
The process for existing tenants
For a sitting tenant whose rent includes electricity, the landlord can't simply stop supplying it. The landlord needs the tenant's written consent, and before asking for it must give the tenant the information the regulation requires. In general terms, that includes:
- A clear statement that the tenant does not have to agree.
- The rent reduction — the amount and how it was calculated, using the method in the regulation.
- Provider details — the suite meter provider's contact information and the OEB's.
- Costs — the provider's fees and charges, including any planned increases, plus its security deposit policy.
- Disconnection policy — what happens if the tenant falls behind on electricity bills.
- Energy information — the regulation also requires information about the unit's electricity use and energy efficiency. Check the current text for exactly what's needed.
There are additional requirements where electricity is the unit's primary heat source, and tenants have the right to ask the Landlord and Tenant Board to review the rent reduction. Many owners convert gradually: install meters building-wide, offer the switch to existing tenants who choose it, and apply it automatically to new tenancies.
What about water?
Water sub-metering in rental buildings is less common and is not covered by the same suite metering framework as electricity. For existing tenants, removing a service included in the rent generally requires their agreement and an appropriate rent adjustment. For new tenancies, the lease governs. Get legal advice before introducing water billing, and be wary of “ratio utility billing” approaches that allocate costs by formula rather than measured use.
Is it worth it?
Arguments for
- Removes exposure to electricity price changes in the operating budget for converted units.
- Measured billing generally encourages conservation.
- Makes the building's cost structure clearer for buyers and lenders.
Arguments against
- Conversion is slow in rent-controlled buildings where most tenants stay for years and may decline.
- The rent reduction for consenting tenants offsets much of the immediate gain.
- Installation costs, possible electrical work and ongoing USMP fees.
- Electrically heated buildings and suites with old, inefficient baseboard heat raise fairness and cost questions for tenants.
Run the numbers per building: installation cost, expected conversion rate over five to ten years, rent reductions, provider fees and the remaining bulk load (common areas, elevators, garage, make-up air). Some buildings come out ahead quickly; others are better served by spending on energy efficiency first.
What a conversion project looks like
- Feasibility. An electrical engineer or provider survey of the building's service, panels and suite wiring. Older buildings sometimes need electrical work before meters can go in.
- Provider selection. Compare the local distributor with licensed USMPs on installation cost, monthly fees, billing, customer service and contract term.
- Financial model. Rent reductions per unit type, expected uptake, ongoing fees and the remaining bulk load.
- Installation. Proper notice of entry for each suite, scheduled in blocks by floor.
- Tenant packages. The disclosure and consent package for existing tenants, with time to read it and ask questions.
- Rent roll update. New rents for consenting tenants, documented and applied from the correct date.
- Lease and listing updates. New tenancies on the suite-metered basis from day one.
Even after conversion, the owner keeps paying for common-area electricity: corridors, elevators, garage, pumps, make-up air and laundry. Those loads are often the better target for efficiency work.
Questions tenants will ask
- “Will I pay more overall?” It depends on their usage. Give them the information the regulation requires and let them decide; pressure undermines the consent.
- “Who do I call about my bill?” The provider, not the landlord — make sure contact details are posted and in every package.
- “What if I can't pay?” The provider's arrears and disconnection rules, set under the OEB's code, apply.
- “Can I change my mind?” Check the regulation and your consent documents, and answer accurately.
Practical tips
- Tell every tenant what's happening before installers arrive, and give proper written notice of entry for meter installation.
- Keep the consent package, calculation and signed consents in each tenant file.
- Update your lease template and listings so new tenancies are clear on who pays.
- Make sure leasing staff explain utility costs to applicants accurately.
How we help
For buildings under our apartment building management, we can model a sub-metering conversion, compare providers, prepare tenant information packages and track consents and rent reductions in the rent roll. Our financial reporting separates bulk utility costs so you can see what's changed.
This guide is general information, not legal advice. Suite metering rules are detailed; read the current regulation or get advice before approaching existing tenants.