Federal transfers are payments from the federal government to lower levels of government. To provinces, major transfers include the Canada Health Transfer (for healthcare), Canada Social Transfer (for social programs), and equalization payments. To municipalities, transfers typically flow through provincial channels via bilateral infrastructure agreements, though some programs like the Canada Community-Building Fund (formerly Gas Tax) are allocated more directly. The transfer system reflects fiscal federalism—the federal government's superior revenue-raising capacity compared to provinces and municipalities that deliver most direct services. Transfer levels significantly affect municipal finances: federal infrastructure funding reduces local taxpayer burden for capital projects, while inadequate transfers to provinces may result in provincial downloading onto municipalities. Municipal organizations advocate for increased and more predictable federal transfers, arguing that municipalities deliver services essential to federal priorities like economic competitiveness and quality of life but lack adequate revenue tools.