An unconditional grant is funding from provincial or federal governments that municipalities can use at their discretion without restrictions on specific purposes. Unlike conditional grants requiring funds be spent on designated programs, unconditional grants provide flexible revenue that councils allocate according to local priorities. Unconditional grants include general operating grants, revenue sharing (like portions of fuel taxes or sales taxes), and some formula-based transfers. Municipalities generally prefer unconditional grants because they respect local autonomy and allow funding to address local priorities. From upper-level government perspectives, conditional grants ensure funding achieves policy objectives, while unconditional grants support local capacity without directing spending. The balance between conditional and unconditional transfers is an ongoing intergovernmental debate.