This sharing occurs when a record is to be disclosed to the person who requested it.
Let us assume that the record comes from two institutions involved in the same case, such as National Defence and Foreign Affairs. They will speak to one another to make sure that they are in agreement about providing the information requested. That is the level at which the exchange takes place. Such consultations are rarely about personal information, but rather matters like national security, legal opinions or justice issues that are to be turned over to an institution. The two will speak to one another to make sure that they agree on what can be disclosed and what cannot.