Hospital exemption refers to the property tax exemption typically applied to hospital properties, recognizing their essential public health function. Hospitals generally don't pay municipal property taxes on their main facilities, though the specifics vary by province and property type—parking structures, retail spaces within hospitals, or staff residences may be taxed differently. Like other exempt properties, hospitals still use municipal services (roads, water, fire protection, police) without directly contributing through property taxes. Some jurisdictions require hospitals to make payments in lieu of taxes or negotiate service agreements. The hospital exemption reflects policy choices about healthcare funding—taxing hospitals would ultimately require offsetting provincial health funding, creating circular money flows. For municipalities hosting major hospitals, the exemption represents significant foregone revenue, particularly problematic in communities where hospital campuses occupy substantial land area.