By A.J. Keilty, President, KEILTY Realty Management
Yes, if the tenant signs. The consent has to be on a form approved by the Board, you have to tell them in writing first that they are free to refuse, and you have to cut the rent.
And not at all if the unit is heated with electricity and one meter would read both the heat and everything else. Converting a hydro-included building to suite meters is not a switch you flip. It is a sequence of gates, each of which can stop the project, and two of them have no cure.
The short version.
Not where an owner looks first. Measured at source on 2026-10-22, the whole consolidated Residential Tenancies Act, 2006 returns zero for "hydro", zero for "submeter", zero for "sub-meter" and zero for "smart meter". It says "electricity", 33 times, and "suite meter", 20 times.
Part VIII of the Act is headed "SUITE METERS AND APPORTIONMENT OF UTILITY COSTS". Section 137 carries the suite-metering side and section 138 the apportionment side.
Four more instruments sit underneath. O. Reg. 394/10, made under the Act, carries the notice periods and the rent-reduction formulas. The Energy Consumer Protection Act, 2010 and O. Reg. 389/10 made under it decide who may install a meter and who may bill off it. The Ontario Energy Board Act, 1998 carries the licence and the penalties.
Read on 2026-10-22, all five printed an e-Laws currency date of 2026-10-19 and five different consolidation dates, from 2026-09-21 for the Act down to 2021-03-31 for O. Reg. 394/10. The regulation holding the arithmetic you have to do is the stalest of the five.
It depends on how the building is fed, and the distinction decides who the licensee can be.
Section 31 of the Energy Consumer Protection Act, 2010 defines a "suite meter" as a unit smart meter or a unit sub-meter. The first is installed by a distributor where the complex is not on a bulk meter, and only a licensed distributor can be that provider.
A unit sub-meter is one installed by a unit sub-meter provider where the complex is connected to a bulk meter. A hydro-included walk-up on one bulk meter is in the second case.
There, section 57 of the Ontario Energy Board Act, 1998 is written as a prohibition on everybody, subject to one opening. It provides that, "except as otherwise provided under this Act, no other person shall, unless licensed to do so under this Part, ... (c.1) engage in unit sub-metering".
O. Reg. 389/10, s.36 describes that activity as "Providing and maintaining unit sub-meters in a multi-unit complex, including billing and collecting payment in respect of the electricity consumed in the multi-unit complex and other associated and ancillary activities". An owner who meters their own building and bills off those meters is doing it.
The opening words leave two doors ajar and neither is open to a landlord today. Section 57.1 lets the Board exempt a person by order, and it is confined to pilot and demonstration projects.
And the section 31 definition of a unit sub-meter provider ends "or such other persons or classes of persons as may be prescribed", a standing power to prescribe unlicensed classes that has not been used here.
Read on 2026-10-22, O. Reg. 389/10 prescribes activities rather than classes of person, and O. Reg. 161/99 under the Ontario Energy Board Act, 1998 returns zero occurrences of "sub-meter", "landlord" and "tenant".
So somebody in the chain holds the licence. O. Reg. 389/10, s.38 (1) permits a suite meter provider to install for each class of unit in a Table, in the circumstances in Column 3 opposite it.
For a rental unit, Column 3 reads: "The residential landlord, owner or other person in charge of the residential complex in which the rental unit is located has retained the suite meter provider to install suite meters in the residential complex in which the rental unit is located". The same Table carries separate rows, with their own conditions, for condominium units, co-operative member units and commercial premises.
Or you become the licensee. The Ontario Energy Board publishes its list of licensed companies, and on 2026-10-22 it showed 27 holding a unit sub-metering licence, a handful of them property businesses rather than metering firms. The published fees that day were $1,000 to apply, $800 a year to hold it, and $200 to renew for an applicant who has paid the annual registration fee.
Doing it unlicensed is an offence under section 126 (1) (a) of the Ontario Energy Board Act, 1998. The fines reach $100,000 for an individual and $1,000,000 for a corporation on a first offence, and section 126 (4.1) lets the court add the monetary benefit.
There is a second track that needs no court. Under section 112.5 the Board may order an administrative penalty "for each day or part of a day on which the contravention occurred or continues", capped at the section 126 maximum for that person and increasable by the monetary benefit. The clocks differ: one year from the Board's knowledge for a prosecution, two years for the penalty.
Only with their signature, and only after a disclosure package they can read and then decline.
Section 137 (3) says a landlord with the obligation to supply electricity "may terminate that obligation by, (a) obtaining the written consent of the tenant in the form approved by the Board; (b) providing adequate notice of the termination of the obligation to the tenant in accordance with the prescribed rules; and (c) reducing the rent, in the prescribed circumstances and in accordance with the prescribed rules, by an amount that accounts for the cost of electricity consumption and related costs."
That is the only route the subsection gives, and the three clauses are joined by "and". There is no Board application, no deemed consent and no notice-only path.
Three things lock the veto in place. O. Reg. 394/10, s.5 (2) requires that "The tenant must be given a statement in writing that the tenant is not required to consent to the termination of the landlord's obligation to supply electricity to the rental unit." A lease clause promising future consent is void under section 137 (18).
And section 137 (4) makes the disclosure a precondition: a landlord shall not terminate the obligation "unless, before obtaining the written consent of the tenant, the landlord has provided the tenant with the prescribed information."
That package is O. Reg. 394/10, s.5, and it runs to seven subsections. The amount of the reduction and how it was calculated. The provider's contact details, a statement that the provider may require a security deposit, the deposit policy, the fee schedule, the circumstances in which those fees may rise and any planned increases.
Then a statement that the provider "may shut off the electricity supply to the rental unit if an amount payable by the tenant is overdue". Contact details for the Ontario Energy Board. If you supply the fridge, its date of manufacture and whatever you know about its efficiency. And, on request, a copy of the agreement between you and the provider, if there is one.
Proceeding without consent carries the heaviest consequence in the section. A breach of subsection (3), (4) or (5) opens section 137 (13), under which the Board may, in addition to the abatement, repair and rent-reduction orders in section 137 (12), "Order that the landlord assume the obligation to supply electricity to the rental unit and set the new rent that can be charged." You can be put back on the hook for the power and have your rent set for you.
Check the lease start date before you work out which rules apply. Section 137 (19) provides that section 137 and its related regulations, as they read immediately before the day the Protecting Tenants and Strengthening Community Housing Act, 2020 received Royal Assent, "continue to apply with respect to tenancy agreements that were entered into before that day." That day was 2020-07-21. Subsections (7) and (8), repealed for every later tenancy, are still live for those, which is why O. Reg. 394/10, s.12 still lists them.
Installing the meter is a separate question from shifting the bill, and you may do the first without the second. Section 137 (2) lets you interrupt supply to install, provided the suite meter provider does the work, the interruption lasts only the minimum time necessary, and you give notice.
O. Reg. 394/10, s.2 makes that 24 hours in writing, specifying a date and time between 8 a.m. and 6 p.m. and the anticipated duration. O. Reg. 394/10, s.3 then requires 30 days' written notice, specifying the date, before the supply obligation ends.
So a building can be fully metered and still entirely on your account. Hold that thought, because it turns out to be worth money.
More than the electricity line on the bill, and the figure depends on which formula you are in.
Two definitions, not one. O. Reg. 394/10, s.4 (1) defines "electricity consumption cost" in relation to the residential complex, which is what the estimate method in s.4 (6) runs on. Section 4 (2) defines it again, in relation to a rental unit, "In subsections (4), (5) and (7)". Both point at the amount on the invoice "under the heading "Your Electricity Charges" and the subheading "Electricity".
Section 4 (1) then defines "additional charges and taxes" separately, as the charges payable "for delivery of the electricity, for regulatory charges, for debt retirement charges, for billing fees and other administrative charges and for all applicable taxes but excluding any one-time setup fees and any penalties or charges related to late payment".
Both go into the reduction. On an Ontario bill the delivery and regulatory lines are a large share of the total. An owner who reduces by the commodity line alone has underpaid the reduction every month until somebody notices.
There are three formulas and you do not get a free choice among them. Section 4 (4) works from the unit's own actual consumption over "the most recent 12-month period for which information is available preceding the date on which the information described in subsection 5 (3) is provided to the tenant".
Section 4 (6) is for buildings with no unit-level history: it carves the common-area load out of the building total and splits the rest by square footage, and it requires that carve-out to be estimated twice "by an individual who holds a licence under the Professional Engineers Act". Section 4 (7) is the electrically heated version, which strips out the heat.
Two traps sit in section 4 and they both run against the owner.
The first is the ratchet. Paragraph 5 of section 4 (3) permits a landlord who used the estimate method to switch to actuals later, and then closes the door: "once the landlord has chosen to use the method described in subsection (4) for any of the rental units in a residential complex, the landlord must use that method in all subsequent cases for the other rental units in that residential complex." It runs one way.
Paragraph 6 settles the consequence of getting the order wrong: the reduction "must be determined by the method that results in the greatest reduction for the tenant".
The second is vacancy. Where the unit sat empty for part of the twelve months, section 4 (5) does not let you use the smaller bill. It scales the occupied months back up to twelve, so which months were empty changes the answer.
One statutory check on the figure exists and has been narrowed to nothing. Section 137 (6) gives the tenant a right to ask for the reduction to be adjusted, and O. Reg.
394/10, s.7 says that for that purpose "there are no prescribed circumstances in which a tenant may request that the landlord adjust the rent reduction provided under subsection 137 (3) of the Act and provide a rebate." Note what that does not cover: a reduction on an electric-heat conversion is made under section 137 (5), not section 137 (3).
The duty to reduce is not quite universal. O. Reg. 394/10, s.19 (1) disapplies clauses 137 (3) (c) and 138 (1) (b) for seven classes of unit, including rent-geared-to-income units. A private walk-up is not among them, but read the list before assuming.
This is the gate that has no cure. It lands squarely on the kind of building an Eastern Ontario owner has in mind when they read a post like this one.
Two instruments say it, from different directions. O. Reg. 394/10, s.6 permits termination for an electrically heated unit "only if both of the circumstances and conditions exist: 1. The electricity supply for the provision of heat in the rental unit is not connected to the meter or suite meter that measures the electricity supplied to the unit for other uses. 2. The landlord does not terminate the obligation to supply electric heat."
And O. Reg. 389/10, s.40 (3) tells the provider it "shall not bill an occupant of a rental unit or a member unit based on the consumption or use of electricity by the occupant in respect of the unit, as measured by a suite meter, if, (a) the suite meter was installed after January 1, 2011 but is not deemed under subsection 43 (2) to have been installed after January 1, 2011; (b) the unit is heated primarily by electricity; and (c) the electricity measured by the suite meter includes the electricity used in heating the unit."
The deeming in subsection 43 (2) is narrow. It reaches only a "specified unit smart meter", a "specified unit sub-meter" or an "excluded unit sub-meter" as section 43 (1) defines those, installed before 2011-01-01. Nothing installed for a conversion today can get there.
Read together, a 1970s walk-up on electric baseboards is not a conversion candidate in the shape the owner has in mind. You can convert the non-heat load only, and that means splitting the heating circuit onto its own meter, a rewire per unit, and keeping the heat on your own bill. In a Brockville winter the heat is the part of the bill worth moving, and the heat is exactly the part you cannot move.
There is no consent exception to section 40 (3) and no grandfathering for an owner who got everything else right. Screen for this first. It costs an hour and it decides whether there is a project.
This is the part that never reaches the conversion spreadsheet, and it is permanent.
Section 137 (15) of the Residential Tenancies Act, 2006 provides that, except under prescribed circumstances, "for the purpose of section 126, a capital expenditure is not an eligible capital expenditure if, (a) a meter or a suite meter was installed in respect of a residential complex before the capital expenditure was made; (b) the capital expenditure failed to promote the conservation of electricity or the more efficient use of electricity; and (c) the purpose for which the capital expenditure was made could reasonably have been achieved by making a capital expenditure that promoted the conservation of electricity or the more efficient use of electricity."
That section 126 is the Act's above-guideline increase section, not the offence section in the Ontario Energy Board Act, 1998 quoted earlier.
The three conditions are cumulative, so an expenditure that does promote conservation is untouched, and so is one where no conservation-promoting alternative would have achieved the same purpose. But the test attaches to the complex, not to the unit, and it applies from the day a meter goes in anywhere in it.
The opening hedge appears to have nothing behind it. Read on 2026-10-22, nothing in O. Reg. 394/10 prescribes circumstances for section 137 (15), and O. Reg. 516/06, the Act's General regulation, returns zero occurrences of "meter".
That changes the trade an owner thinks they are making. It is not "give up some rent, collect the hydro saving". It is give up the rent permanently and collect the hydro saving.
Then argue a conservation point every time you want to recover a roof or a boiler through an above-guideline rent increase application. The useful life of the thing you replaced, and how long that recovery runs, is a separate calculation. We set it out in how long Ontario says your furnace or roof lasts.
Two smaller obligations have no end date. Under section 137 (9) and O. Reg. 394/10, s.10, a fridge you provide has to be one manufactured on or after 1994-01-01, and any replacement one manufactured on or after 2002-12-31. O. Reg.
394/10, s.12 gives a tenant one year after the alleged breach first occurred for a breach of section 137 (2), (3), (4), (5), (7) or (8), and then says there are "no restrictions on the circumstances in which an application concerning a breach of subsection 137 (9) or (10) of the Act may be made." There is no clock on the fridge at all.
And those duties do not wait for a conversion. O. Reg. 394/10, s.11 attaches them in any circumstance where the landlord is not obligated to supply electricity "other than as a result of the termination under section 137 of the Act" of that obligation, which catches every unit you re-let on a hydro-excluded basis after turnover.
Sometimes, and for a heat-included building it may be the only route that reaches the cost you actually care about.
Section 138 (1) lets "A landlord of a building containing not more than six rental units who supplies a utility to each of the rental units in the building" charge each tenant a share of the cost, again with written consent, prescribed notice and a prescribed rent reduction.
O. Reg. 394/10, s.13 gives the calculation, s.14 the 30 days' written notice and what it has to state, and s.15 the rent reduction. Section 138 (2), like section 137 (16), takes the utility payment outside the definition of rent.
Four differences matter. It is capped at six units, so a seventh kills it. It applies to any utility rather than to electricity alone, which is the point for a building where the heat is gas or oil.
It carries a disclosure duty to every future tenant that section 137 does not. Section 138 (4) requires you, before signing with a prospective tenant, to give them the unit's share as a percentage, the building's total utility cost for the prescribed period, and a statement of which parts of the building were vacant and when.
And the collection position is weaker. Section 138 (3) bars you from serving a notice under section 59, or applying under section 69 or 87, where the step is based on the tenant's failure to pay the utility charge. Under section 137 the tenant owes the utility rather than you, and the provider's own shut-off policy does the enforcing.
Section 137 (17) is what makes that work. Where the tenant is responsible for the electricity and a landlord, the landlord's agent or a suite meter provider is enforcing rights under section 137 or under section 31 of the Electricity Act, 1998, electricity "is deemed not to be a vital service within the meaning of section 21 and any interference with the supply of electricity is deemed not to be an interference with the tenant's reasonable enjoyment within the meaning of sections 22 and 235." That is the Act's only mention of the Electricity Act, 1998, and section 138 has no equivalent.
Both routes narrow your capital recovery, but on different triggers. Section 137 (15) bites when a meter is installed. Section 138 (10) bites when you charged tenants a share, and it has no "except under the prescribed circumstances" opening at all.
Six units, one bulk meter, heat and hydro included, gas-fired boiler, tenants on month-to-month agreements. Work the gates in order.
Is the heat electric? No, the boiler is gas, so O. Reg. 394/10, s.6 and O. Reg. 389/10, s.40 (3) do not bite. The project is alive. Had the answer been yes, it would have ended here.
Who does the metering? One bulk meter puts you on the sub-metering side, so either a licensed provider from the Board's list or your own company once licensed.
Which formula? Today there is no unit-level history, so section 4 (6) is the only method and a professional engineer's estimate of the common-area load is a line in the budget. But the meters can go in while every bill stays on your account: under O. Reg. 389/10, s.40 (4) the provider is "permitted but not required" to bill the landlord where the supply obligation has not been terminated.
Run that for twelve months, then ask the provider under O. Reg. 389/10, s.41 (1) for the per-unit cost and kilowatt hours, which it has ten days to supply. Section 4 (2) (b) expressly contemplates a figure "determined using information obtained from the distributor or suite meter provider" where there is no invoice to the unit.
Section 4 (4) becomes available and the engineer comes off the budget. The cost is a year rather than a fee. Then the ratchet bites: having used section 4 (4) once, you use it for every other unit.
Who consents? All six have to be asked, each gets the full section 5 package first, and any of them may decline. The units that decline stay on your account until they turn over, so you run two billing arrangements in one building in the meantime.
What have you given up? The electricity payment stops being rent at all, by section 137 (16), which also puts it outside the illegal-charge rules in sections 134 and 135. And from the day the first meter goes in, the complex is inside section 137 (15) for every future capital project.
Whether that trade is worth making is an arithmetic question. It turns on the size of the hydro line and the number of tenants likely to consent. It also turns on whether you can wait a year for the actuals, and on what you were planning to spend on the building in the next decade.
It is the kind of question we work through with owners before anyone orders a meter. Our small multi-family management covers buildings like this one across Brockville and the rest of Eastern Ontario.
Can I make a sitting tenant pay their own hydro? Only with their written consent on a form approved by the Board, under section 137 (3) (a) of the Residential Tenancies Act, 2006. The tenant may refuse, and O. Reg. 394/10, s.5 (2) requires you to tell them in writing that they are not required to consent. A lease clause promising future consent is void under section 137 (18).
Do I need a licence to sub-meter my own building? Yes, or you retain someone who holds one. Section 57 of the Ontario Energy Board Act, 1998 says that, except as otherwise provided under that Act, no person shall engage in unit sub-metering unless licensed under that Part. No landlord class has been prescribed. Owners do hold the licence: 27 companies were on the Board's list on 2026-10-22.
How much do I have to reduce the rent? By a figure calculated under O. Reg. 394/10, s.4, using one of three formulas, and it includes delivery, regulatory, debt retirement, billing and administrative charges and applicable taxes, not just the electricity line. One-time setup fees and late-payment penalties are excluded.
Can I convert a unit heated by electricity? Not in the way an owner pictures it. O. Reg. 394/10, s.6 permits it only where the heating supply is not connected to the suite meter and you keep paying for the electric heat, and O. Reg. 389/10, s.40 (3) separately prohibits billing an occupant where a post-2011 meter reads a primarily electric-heated unit's heating load.
If you are weighing a suite-metering conversion on a small building, the gate that kills it is visible in an hour, and the one that costs you is visible only years later. Get My Free Rental Evaluation and A.J. Keilty will call you within 20 minutes in business hours to tell you which gates your building passes.
This post is general information about Ontario residential tenancy law and energy regulation as of 2026-10-22, not legal advice. O. Reg. 394/10, which carries the formulas, was last consolidated 2021-03-31. Legislation, regulations, rules and tribunal practice change. For advice on a specific property or situation, speak with a lawyer or licensed paralegal.
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