Payments in lieu of taxes (PILT) are amounts federal and provincial governments pay municipalities instead of property taxes on Crown-owned properties that would otherwise be tax-exempt. While governments cannot be compelled to pay municipal taxes, PILT programs recognize that municipal services (roads, fire protection, water) benefit government facilities. Federal PILT payments are governed by the Payments in Lieu of Taxes Act, though amounts often fall below what comparable private properties would pay. Municipalities with significant federal or provincial facilities, like capital cities or military bases, particularly feel PILT shortfalls. Municipal associations advocate for fairer PILT reflecting actual service costs.