A renovation mortgage allows the buyer to add up to 10% of the purchase price (capped at ~$40,000) for renovations on the purchase of their new home. Improvements must add value (e.g. kitchen, bathroom, garage, basement, paint, etc.
An excellent program, which I have used myself, if you want to finance renovations on your mortgage as opposed to paying out-of-pocket.
A qualified contractor (get three quotes) will provide an estimate for the renovations, which is approved by the bank. The contract is not paid until the bank does a final appraisal to ensure everything was done as per the initial quote, and your lawyer releases the money to the contractor. This ensures the contractor pays for labour and materials upfront from their own pocket, and ensure they only get paid if the work is properly completed.