Municipal Financial Capacity Grant is a legislated unconditional operating grant to assist municipalities whose costs of delivering a core set of services exceed their ability to pay, when compared to similar municipalities. In addition, towns are provided with a $50,000 Town Foundation Grant as recognition of the particular challenges they face due to local road responsibilities and assessment bases. Prior to 2019, the Municipal Financial Capacity Grant was called 'Equalization Grant'.
The Municipial Grants Act (S.8, s.19A) provides for the payment of the Municipal Financial Capacity Grant and the Town Foundation Grant, which are in the form of unconditional transfers.