Grant funding refers to using money received from higher levels of government (provincial or federal) to pay for municipal projects and programs. Unlike loans that require repayment or own-source revenues from local taxes and fees, grants are transfers that don't need to be repaid (assuming conditions are met). Grant funding may cover specific projects (infrastructure grants for a water treatment plant upgrade), ongoing programs (social service funding), or general municipal needs (unconditional grants). Municipalities actively pursue grant funding to reduce local tax burden and enable projects that couldn't be afforded otherwise. However, grant dependency creates risks: programs may be discontinued, conditions may restrict municipal flexibility, and application processes consume staff time. Effective municipal finance balances grant funding with sustainable own-source revenues, ensuring core services don't depend entirely on discretionary provincial or federal decisions.