Compliance costs are expenses municipalities incur to follow provincial regulations, reporting requirements, and mandated processes—costs that do not directly deliver services to residents but are necessary to meet legal obligations. Examples include preparing required reports, conducting mandated audits, following prescribed procurement processes, and implementing provincially-required administrative systems. Municipalities argue that excessive compliance costs represent downloading—provinces impose requirements without providing resources to meet them. While some requirements serve legitimate accountability purposes, accumulated compliance burdens can strain municipal capacity, particularly for smaller municipalities with limited staff. Debates about red tape reduction include examining whether compliance requirements are proportionate to their benefits.