Restricted vs. Unrestricted Government Grants
Quick answer: Restricted grants can be used only for defined purposes or costs. Unrestricted grants give the receiving government more discretion over how the money is used.
Why the distinction matters
A restricted grant may support an important project without freeing the same amount of money elsewhere in the municipal budget. An unrestricted transfer can have a broader fiscal effect because council has more flexibility in allocating it.
What does public-finance research show?
Comparative public-finance research uses both restricted and unrestricted funding systems to show how grant design can change local spending and tax decisions.
Important: This is a general funding explainer, not a description of any specific Ontario program.