Local governments in the United States and Canada rely on various revenue sources to fund essential services, infrastructure projects, and community programs. While property taxes, fees, and intergovernmental transfers make up a significant portion of local budgets, grant funding is critical in supporting new initiatives, addressing urgent needs, and improving public services.
City clerks, city managers, elected officials, and other local government staff can help municipalities secure external funding and maximize community impact by understanding opportunities that may relate to key initiatives in their own municipality. Here we’ll explore the various types of grant opportunities available to local governments in the U.S. and Canada, along with examples of programs and best practices for securing funding.
Federal Grants for Local Governments
United States
Federal grants are a significant source of funding for local governments, typically administered by agencies such as the U.S. Department of Housing and Urban Development (HUD), the Environmental Protection Agency (EPA), and the Federal Emergency Management Agency (FEMA). These grants are either allocated through formula funding or require competitive applications.
Formula Grants
Formula grants are distributed based on predetermined factors like population size or economic conditions. Local governments do not compete for these grants but must meet eligibility requirements.
- Community Development Block Grant (CDBG) Program – Administered by HUD, this grant funds affordable housing, infrastructure improvements, and economic development in low- and moderate-income communities.
- Surface Transportation Block Grant (STBG) Program – Managed by the Federal Highway Administration (FHWA), this program funds transportation infrastructure projects.
- Edward Byrne Memorial Justice Assistance Grant (JAG) Program – Provides flexible funding for law enforcement, courts, and crime prevention initiatives.
Competitive (Discretionary) Grants
These grants require municipalities to apply with proposals that demonstrate project feasibility and community impact.
- Building Resilient Infrastructure and Communities (BRIC) Program – Administered by FEMA, this program funds projects that mitigate disaster risks.
- Rebuilding American Infrastructure with Sustainability and Equity (RAISE) Grants – Supports transportation projects that improve economic and environmental outcomes.
- Assistance to Firefighters Grants (AFG) – Helps fire departments obtain essential equipment, training, and safety programs.
Canada
Canada’s federal government distributes grants through direct funding programs and provincial partnerships.
Formula-Based Grants
- Canada Community-Building Fund (formerly Gas Tax Fund) – Provides municipalities with long-term, indexed funding for core infrastructure.
Competitive Grants
- Disaster Mitigation and Adaptation Fund (DMAF) – Funds infrastructure projects that reduce disaster risks.
- Green Municipal Fund (GMF) – Administered by the Federation of Canadian Municipalities (FCM), this program supports sustainability and climate action projects.
- Smart Cities Challenge – Encourages municipalities to develop innovative, technology-driven solutions for urban challenges.
Provincial and State Grants for Local Governments
United States
State governments offer grants to support local infrastructure, economic development, and essential services. Many state programs are funded by federal pass-through dollars.
- State Revolving Funds (SRFs) – EPA-funded, state-managed programs providing low-interest loans for water infrastructure.
- State Historic Preservation Grants – Supports local historic building restoration.
- State-Specific Community Development Grants – Many states operate their own community development programs that complement the federal CDBG program.
Canada
Each province and territory administers its own grant programs for municipalities. Some examples of current and previous grant funding opportunities through these programs are:
- Housing-Enabling Core Servicing Fund (Canada) – This fund provides up to $20 million per municipality for infrastructure supporting housing development.
- Ontario Municipal Modernization Program – Funds projects that improve local government efficiency and digital transformation.
- Alberta Municipal Water/Wastewater Partnership – Supports critical water infrastructure projects.
- British Columbia’s Community Gaming Grants – Distributes funds from commercial gambling revenues to nonprofit organizations.
Infrastructure and Capital Project Grants
United States
- Mega Grant Program – Supports large, complex infrastructure projects that generate significant economic or safety benefits.
- Water Infrastructure Finance and Innovation Act (WIFIA) Program – Offers low-interest loans for water and wastewater projects.
- Better Utilizing Investments to Leverage Development (BUILD) Grants – Funds major transportation infrastructure projects.
Canada
- Investing in Canada Infrastructure Program (ICIP) – A federal-provincial funding initiative supporting public infrastructure projects.
- Small Communities Funds – Targets infrastructure needs in smaller municipalities. These types of grants are administered through various provinces.
Economic Development and Innovation Grants
United States
- Economic Development Administration (EDA) Grants – Funds business incubators, job training, and economic revitalization initiatives.
- Rural Energy for America Program (REAP) – Supports renewable energy projects in rural communities.
Canada
- Regional Economic Growth through Innovation (REGI) Program – Funds small business growth and economic diversification.
- Canada Digital Adoption Program – Helps fund innovative small businesses.
Environmental and Sustainability Grants
United States
- Climate Pollution Reduction Grants – Part of the Inflation Reduction Act, this program funds municipal climate initiatives.
- Energy Efficiency and Conservation Block Grant (EECBG) Program – Supports local energy efficiency and conservation projects.
Canada
- Low Carbon Economy Fund – Provides funding for greenhouse gas reduction initiatives.
- Clean Energy for Rural and Remote Communities Program – Helps municipalities transition to renewable energy.
Public Safety and Emergency Preparedness Grants
United States
- Homeland Security Grant Program (HSGP) – Supports terrorism prevention and emergency preparedness.
- Fire Prevention and Safety (FP&S) Grants – Funds fire safety and prevention programs.
Canada
- Municipal Emergency Preparedness Fund – Supports disaster planning and response efforts.
- Security Infrastructure Program (SIP) – Funds safety measures for vulnerable community spaces.
Social Services and Community Development Grants
United States
- HOME Investment Partnerships Program – Provides funding for affordable housing initiatives.
- Ryan White HIV/AIDS Program – Funds municipal health services for individuals with HIV/AIDS.
Canada
- Reaching Home: Canada’s Homelessness Strategy – Supports housing stability initiatives.
- Healthy Communities Initiative – Funds projects that improve community health spaces and accessibility.
Funding Is Out There: Use It!
Grants remain a vital source of funding for municipalities looking to improve infrastructure, public services, and community development. Local governments can maximize their chances of securing funding by:
- Monitoring grant opportunities through federal, state/provincial, and nonprofit organizations.
- Aligning projects with funding priorities to maximize eligibility.
- Preparing strong applications that clearly outline objectives and expected community benefits.
By strategically leveraging grants, local governments can reduce financial strain, increase public service capacity, and improve community well-being.
Note: Grant programs and funding availability are subject to change. Always check official sources for the latest details.
