A cost-sharing agreement is a formal arrangement between two or more parties to divide the costs of a shared facility, service, or initiative. Municipal cost-sharing commonly occurs between neighbouring municipalities sharing recreation facilities, emergency services, or regional infrastructure. Agreements specify what percentage each party pays, how costs are calculated, governance arrangements, and dispute resolution processes. Cost-sharing can achieve economies of scale while maintaining local ownership. Federal-provincial-municipal cost-sharing is common for infrastructure projects—typically with each level contributing a percentage (often one-third each, though ratios vary). Negotiating fair cost-sharing formulas can be challenging when parties have different resources and benefit differently.