Tax exemption is the complete elimination of property tax obligation for qualifying properties, as distinct from reductions or abatements. Provincial legislation typically exempts certain property categories: government properties, religious properties used for worship, registered charities, hospitals, and sometimes educational institutions. Exemptions recognize that taxing these properties would effectively mean government taxing itself or placing tax burdens on charitable and religious activities. Exempt properties still consume municipal services (fire, roads, policing) without contributing tax revenue, creating what municipalities call 'tax-exempt burden.' This burden falls on taxable properties. Municipalities advocate for 'payments in lieu of taxes' from exempt property owners or provincial compensation for lost revenue from exemptions mandated by provincial policy.