What Is Submetering? A Complete Guide for Ontario Landlords

What Is Submetering?

Submetering is the practice of installing individual utility meters in each unit of a multi-unit building so that each tenant's consumption can be measured and billed separately. Instead of the landlord receiving one bulk utility bill and absorbing the cost (or trying to split it evenly), submetering lets you charge each tenant for exactly what they use.

Think of it this way: your building has one main meter from the utility company. A submetering system adds secondary meters downstream of that main meter, one for each unit. These sub-meters track individual consumption for electricity, water, gas, or any combination of utilities.

The result? Tenants pay for their own usage, landlords recover utility costs, and everyone has an incentive to conserve energy.

How Does Submetering Work in Practice?

The process is more straightforward than most landlords expect. Here is how it typically works from start to finish:

1. Assessment and Installation

A licensed submetering provider visits your building to assess the electrical panel (or plumbing, for water submetering) and determine the best meter placement for each unit. For electricity, this usually means installing current transformer (CT) meters at the electrical panel. For water, individual flow meters are installed on supply lines to each unit.

Installation is typically non-invasive and can often be completed in a single day for buildings with up to 20 units. Tenants usually experience little to no disruption.

2. Meter Reading and Data Collection

Modern submeters transmit usage data automatically. Most systems use wireless communication or pulse-output technology to send readings to a central hub or directly to the submetering provider's platform. Gone are the days of someone physically walking through the building to read meters.

3. Billing

The submetering provider generates individual invoices for each tenant based on their actual consumption. Tenants receive a clear bill showing their usage in kilowatt-hours (kWh) for electricity or cubic meters for water, along with the applicable rate.

Companies like Axis Meter handle the entire billing process on behalf of the landlord, including invoice generation, tenant inquiries, and payment collection. This means you do not need to become a billing department yourself.

4. Ongoing Management

Once the system is up and running, the day-to-day management is minimal for landlords. The submetering provider monitors the meters, handles billing cycles, manages tenant questions, and deals with any technical issues. Your involvement is limited to reviewing reports and collecting the savings.

The Legal Framework in Ontario

Ontario has specific rules governing submetering in residential buildings. Understanding these rules is essential before you move forward.

The Residential Tenancies Act (RTA)

Under the RTA, landlords cannot simply start charging tenants for utilities that were previously included in rent. If your current lease includes utilities, you must follow the proper legal process to transition to submetered billing. This typically involves:

• Providing adequate notice to tenants about the change
• Reducing rent by an amount that reflects the utility costs being transferred to the tenant
• Using an approved submetering provider that complies with Ontario regulations
• Ensuring meters meet Measurement Canada standards for accuracy and certification

For new tenancies where utilities were never included, the process is simpler. You can structure the lease so that tenants are responsible for submetered utilities from day one.

Measurement Canada Requirements

All meters used for billing purposes in Canada must comply with Measurement Canada's standards. This means your submetering provider must use certified, approved meters that meet accuracy requirements. Meters must also be inspected and re-certified on a regular schedule.

This is not something you need to manage yourself. A reputable provider like Axis Meter uses Measurement Canada-approved equipment and handles all compliance requirements as part of their service.

The Ontario Energy Board (OEB)

For electricity submetering, the OEB regulates unit sub-metering providers. Licensed providers must follow specific rules about billing practices, dispute resolution, and consumer protection. Always verify that your chosen provider holds the necessary OEB license.

Types of Submeters

Not all submeters are the same. The type you need depends on which utilities you want to submeter and the physical setup of your building.

Electricity Submeters

These are the most common type in Ontario. They measure electricity consumption in kilowatt-hours and come in two main varieties:

• CT (Current Transformer) meters: Non-invasive meters that clamp around existing wiring at the electrical panel. These are the most common for retrofit installations because they do not require rewiring.
• Socket-based meters: Installed in a meter socket, similar to a utility company's main meter. These are more common in new construction or major renovations.

Water Submeters

Water submeters measure water flow to individual units. They are installed on the water supply lines and measure consumption in cubic meters or litres. Water submetering is growing in popularity across Ontario as water and sewer costs continue to rise.

Gas Submeters

Less common in Ontario rental buildings, gas submeters measure natural gas consumption for units with individual gas-fired heating or appliances. These are typically found in townhouse-style complexes or buildings where each unit has its own furnace.

Smart Meters and IoT Solutions

The latest generation of submeters includes smart meters that provide real-time usage data, leak detection (for water), and remote monitoring. These systems give both landlords and tenants visibility into consumption patterns, making it easier to identify waste and reduce costs.

Who Handles the Billing?

One of the biggest concerns landlords have about submetering is the billing process. The good news: you do not have to do it yourself.

In Ontario, most submetering is handled by licensed third-party providers who take care of everything:

• Meter installation and ongoing maintenance
• Reading meters on a regular billing cycle (monthly or bi-monthly)
• Generating invoices for each tenant
• Collecting payments from tenants
• Handling disputes and tenant inquiries
• Providing landlord reports showing building-wide consumption and trends

Axis Meter is one such provider, offering full-service submetering for Ontario landlords. They handle meter installation, reading, billing, and tenant support so that landlords can focus on managing their properties rather than managing utility accounts.

Benefits of Submetering for Landlords

Why are so many Ontario landlords switching to submetering? The benefits are compelling:

Cost Recovery

The most obvious benefit. When tenants pay for their own utilities, you stop absorbing those costs. For a 10-unit building, this can mean recovering $6,000 to $18,000 per year in utility costs that were previously eating into your net operating income.

Tenant Conservation

When people pay for what they use, they use less. Studies consistently show that submetered tenants reduce consumption by 15 to 30 percent compared to tenants on bulk billing. Lower building-wide consumption means lower costs even on common areas.

Increased Property Value

Commercial real estate is valued based on net operating income (NOI). Reducing your utility expenses directly increases your NOI, which increases your property's appraised value. Submetering can add tens of thousands of dollars to your building's worth.

Fairness

Bulk billing punishes conservative tenants and rewards wasteful ones. The tenant who keeps the heat at 19 degrees subsidizes the one who blasts it at 25 all winter. Submetering eliminates this inequity.

Common Concerns and How to Address Them

"Will my tenants be upset?"

Change always involves some pushback. But most tenants understand the fairness argument, especially when combined with a rent reduction. Communicate clearly, explain the process, and give adequate notice. Most tenants adjust quickly.

"Is it expensive to install?"

Installation costs vary depending on the building and the type of meters, but most providers offer financing or include installation costs in their service agreement. The payback period is typically 6 to 18 months. After that, the savings go straight to your bottom line.

"What about common area costs?"

Common area utilities (hallway lighting, laundry rooms, elevators) remain the landlord's responsibility. Submeters only track unit-level consumption. However, since overall building consumption typically drops after submetering, your common area costs often decrease as well.

How to Get Started with Submetering

Ready to explore submetering for your building? Here is a simple roadmap:

1. Review your current utility costs. Calculate how much you are spending per unit per month. This gives you a baseline for estimating savings.
2. Check your leases. Determine whether utilities are currently included in rent. If so, you will need to plan for rent reductions and proper notice.
3. Contact a licensed provider. Get an assessment and quote for your building. A company like Axis Meter can evaluate your property and give you a clear picture of costs, timelines, and expected savings.
4. Communicate with tenants. Be transparent about the change, the timeline, and how it will affect them. Most landlords find that clear communication prevents most issues.
5. Track your results. Use a property management platform like BricksAbove to monitor your expenses before and after submetering. The numbers will speak for themselves.

Submetering and Property Management Software

Submetering works even better when combined with a solid property management system. Tracking utility costs, monitoring your NOI, and keeping lease records organized all become easier with the right tools.

BricksAbove helps Ontario landlords manage their entire portfolio, from leases and tenants to maintenance and finances. Pair it with a submetering provider and you have a complete system for maximizing your rental income while keeping your properties running smoothly.

Before committing to a purchase, run the numbers with our free mortgage calculator to understand your monthly payment obligations. Then use the cash flow calculator to see whether the rental income will cover your costs and leave room for profit.

The Bottom Line

Submetering is not a gimmick. It is a proven strategy for reducing costs, increasing fairness, and adding value to your rental property. Ontario's regulatory framework supports it, licensed providers make it easy, and the financial case is clear.

If you have been paying utility bills for your tenants and wondering where your margin went, submetering is your answer. Start with a building assessment, pick a licensed provider, and watch the savings add up.