Abstract A regional ensemble prediction system (REPS) with the limited-area version of the Canadian Global Environmental Multiscale (GEM) model at 15-km horizontal resolution is developed and tested. The total energy norm singular vectors (SVs) targeted over northeastern North America are used for initial and boundary perturbations. Two SV perturbation strategies are tested: dry SVs with dry simplified physics and moist SVs with simplified physics, including stratiform condensation and convective precipitation as well as dry processes. Model physics uncertainties are partly accounted for by stochastically perturbing two parameters: the threshold vertical velocity in the trigger function of the Kain–Fritsch deep convection scheme, and the threshold humidity in the Sundqvist explicit scheme. The perturbations are obtained from first-order Markov processes. Short-range ensemble forecasts in summer with 16 members are performed for five different experiments. The experiments employ different perturbation and piloting strategies, and two different surface schemes. Verification focuses on quantitative precipitation forecasts and is done using a range of probabilistic measures. Results indicate that using moist SVs instead of dry SVs has a stronger impact on precipitation than on dynamical fields. Forecast skill for precipitation is greatly influenced by the dominant synoptic weather systems. For stratiform precipitation caused by strong baroclinic systems, the forecast skill is improved in the moist SV experiments relative to the dry SV experiments. For convective precipitation rates in the range 15–50 mm (24 h)−1 produced by weak synoptic baroclinic systems, all experiments exhibit noticeably poorer forecast skills. Skill improvements due to the Interactions between Soil, Biosphere, and Atmosphere (ISBA) surface scheme and stochastic perturbations are also observed.