The RCMP cost-sharing formula determines how contract policing costs are divided between federal, provincial, and municipal governments. Under current agreements, the federal government subsidizes a percentage of policing costs, with the subsidy larger for smaller communities. Municipalities over 15,000 population typically pay 90% of direct policing costs, while those under 15,000 pay 70%, with the federal government covering the difference. Provincial governments may provide additional subsidies for very small communities. The formula recognizes that smaller communities have limited tax bases to support full policing costs. Formula details are negotiated in 20-year Provincial Police Service Agreements between Canada and contracting provinces.