A federal grant is funding provided by the federal government to municipalities, typically for specific purposes like infrastructure construction, community programs, or capital projects. Unlike loans, grants don't require repayment. Federal grants to municipalities usually flow through provinces under bilateral agreements or directly through specific programs. Major federal grant programs support transit expansion, water and wastewater infrastructure, community facilities, housing initiatives, climate adaptation, and economic development. Grant applications typically require municipalities to demonstrate project readiness, provide matching funding, and commit to reporting on outcomes. Grants differ from the Canada Community-Building Fund (formerly Gas Tax Fund), which provides formula-based allocations without project-specific applications. Federal grant programs change with government priorities—municipalities maintain awareness of available programs and align their project planning with funding opportunities to maximize external funding for local priorities.