Grant indexation refers to automatic annual increases in grant amounts based on inflation, population growth, or other formula factors, rather than requiring annual negotiations or discretionary decisions. Indexed grants provide more predictable funding for municipalities, allowing better long-term planning. For example, a grant indexed to inflation automatically adjusts with the Consumer Price Index, maintaining purchasing power without requiring annual advocacy for increases. Indexation can also be tied to population (adjusting as communities grow), assessment growth, or economic indicators. While indexed grants provide stability and simplicity, they may not reflect actual cost changes in specific service areas and can lock in funding formulas that become outdated. Municipalities generally prefer indexed grants over those subject to annual discretionary decisions, as they reduce uncertainty and politicization of funding levels. However, indexed grants still require periodic review to ensure underlying formulas remain appropriate.