The distinction between transit capital and operating funding is a significant intergovernmental concern. Federal infrastructure programs fund transit capital (new vehicles, facilities, expansions) but typically exclude operating costs (drivers, fuel, maintenance). This creates frustration for municipalities because expanding transit systems increases ongoing operating costs that must be funded from fares, municipal taxes, or limited provincial operating grants. A transit system can secure federal funding to build a new line but struggle to afford running it. Municipalities advocate for federal operating support, arguing that sustainable transit requires addressing both capital and operating needs. The capital-operating split reflects federal preferences for one-time investments over ongoing obligations, but leaves municipalities with long-term funding challenges.