Revenue sharing is an arrangement where provincial governments share a portion of certain tax revenues with municipalities. Instead of one-time grants, revenue sharing provides ongoing, formula-based transfers that grow with the provincial tax base. Examples include sharing portions of provincial income tax, fuel tax, or sales tax revenues. Revenue sharing is considered more predictable and sustainable than discretionary grants. It recognizes that municipalities contribute to provincial economic activity and should share in resulting tax growth. Some provinces have formal revenue-sharing agreements with municipalities; others provide more variable grant funding. Municipal associations often advocate for expanded revenue sharing arrangements.