When you're the one paying to keep the heat and lights on in a rental, that cost is a rental expense. On Form T776, it goes on line 9220, Utilities.
What belongs here
Expenses for utilities such as gas, oil, electricity, water, and cable — if your rental arrangement specifies that you pay for the utilities of your rental space or units.
That condition is the whole line. The bill has to be yours to pay under the arrangement you have with your tenant, not simply a bill that happens to arrive with your name on it.
What does not belong here
Utilities the tenant pays directly. If the lease puts the hydro account in the tenant's name, it isn't your expense, and nothing about it belongs on your return.
Telephone and cellphone costs. The guide covers these under line 9270, other expenses — including the rule that the basic monthly rate of your home phone isn't deductible.
What to keep
Keep detailed records of the rental income you earn and the expenses you incur, supported by invoices, receipts, contracts, and other supporting documents. For this line:
- the utility bills themselves, showing the service address and the period
- the lease or rental agreement — this is the document that establishes the arrangement says you pay
That second one is easy to overlook and is the one that actually supports the claim. A hydro bill proves you paid; the lease is what shows you were the one who was supposed to.
Don't send them in with your return — keep them in case the Canada Revenue Agency (CRA) asks to see them. The CRA may not allow an expense you can't support with a document. Generally, keep your records for six years from the end of the tax year they relate to.
If you rent out part of the place you live in, one bill covers both of you. Form T776 has a personal portion column for exactly this: you enter the full amount, then the part that relates to your own use. That split is worked out when you file — it isn't printed on the bill.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.