Economic history of Ottawa


Canada is a developed country that has a high standard of living. Most cities in the country are also well developed and offer a quality life for the people. To have a deep understanding of the economic development of the nation, it is important to take a look at the development of its cities. In this paper, I am going to take a look at the city of Ottawa. The paper focuses on the history of the city, its challenges, economic growth and the progress it has made over the years. The understanding of the economic development of this city as the capital of Canada helps us to understand the far that the nation has come. 

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Ottawa is the capital city of Canada. It is in the province of Ontario and sits near the Ottawa River and borders Quebec. By population, the city is the fourth largest in Canada. Over the years since it was founded, the city has evolved and become a political as well as a technological hub. The name of the city comes from the river that flows nearby. The city is the most developed and has the highest number of people in employment. The city offers its residents the highest quality of life in Canada and is a leader in technology and other knowledge based industries (Ottawa, 2014).

The city was chosen as the capital of Canada in 1857 by Queen Victoria. She was presented with the chance to name the capital of Canada as a symbol of political inclusion. Despite there being other cities that would have been suitable for the selection, the Queen decided to select Ottawa. The main reason for this selection is its position that she found to be strategic.  Its location that is in the forest and far from the American border and its being on a cliff made it a secure location for a city (Cavendish, 2007).

The city is quite isolated from the other cities, but even so used to have seasonal transportation through the river Ottawa and through waterways such as Rideau. Later in 1854, there was built a railway line that connects Prescott and other areas. This railway line was an all season transportation means that was of great significance in improving trade and transport (Department of Economic Development and Innovation, 2014).

In the 1850s, the city started growing much faster sawmills were being built at a fast rate. This created lots of jobs and accelerated the rate of development in the city. The sawmills constructed became some of the largest in the world. The construction of buildings such as the parliament and other government buildings made Canada one of the countries that had the largest construction projects.  In the late 1870s, Ottawa was the leading city in Canada in offering street lighting powered by electricity (Ottawa, 2014).

Among the key factors that have contributed to the growth of the city are the construction of the Rideau Canal amongst other industries such as lumber and its selection as the capital city of Canada. The name of the city comes from the indigenous people that used the Ottawa for fishing, hunting a means to carry out business. As time progressed towards the 1900s, the timber business slowed in both supply and demand, making the business to reduce. At the same time, however, the economy of Canada was becoming increasingly export oriented especially to the United States. This made it necessary to have a good railway system that would support the shipment of goods (Department of Economic Development and Innovation, 2014).

In the 1950s, the city’s outlook was improved and changed to look better as a modern city. The technological boom made it possible to have many factories and companies that produced many good products. The high level of production made the country to be compared to the popular Silicon Valley in the United States. 

One of the key things that kick started the development of Ottawa is the development of the Rideau Canal that was supposed to join the Ottawa River and lake Ontario. The construction of the canal started in 1926 when the team of engineers and surveyors was collected to oversee its construction. The city hired the royal sappers and miners in 1827. These were the personnel to undertake the construction of the canal that started in different places. One of the places where construction started was in Ottawa (Ottawa, 2014). 

Among the other key industries that developed during the early times in this city include brewing. One company in this industry is the Victoria brewery that started in 1829. As times continued, the company was passed into different hands and was a main source of income and employment to the people of Ottawa. During the construction of the canal, there was a huge need for labor that was needed for construction. It was a huge benefit to have immigrants from Ireland and others who crossed from Quebec, though the latter were French speaking. The canal was finally completed in 1832, and the city’s plan remains valid even today. 

After the completion of the canal, there was more rise in the manufacture of industrial products. For instance, there was the start of the Royal Carnage Factory that would was used in the manufacture of wagons and carriages. Later on in 1840, another factory was built to facilitate the building of such machinery as the boilers, steam engines and millers. Since this was a time of industrial revolution, there were other companies such as the City Foundry that was also supposed to manufacture agricultural machinery and milling equipment (Department of Economic Development and Innovation, 2014).

As earlier mentioned the timber industry attracted many immigrants and entrepreneurs alike. All sorts of people were drawn to the city in the hope that they will benefit in some way from the booming business. Some of the timbers that were processed would be sent to other cities such as Quebec.

In those times, there were no good roads. Since there were no phones nor television, the city was only linked to the external world through the railway line. The birth of the city of Ottawa was a result of the renaming of the Bypass city. The incorporation of the Bypass city to become Ottawa, a name after the river that was the center of the people’s livelihood (Ottawa, 2014).

As mentioned above earlier, the queen was once given the chance to get to choose the final capital of the Canada. She chose to take Ottawa despite there being other cities that effectively competed with the city. However, as we said earlier, the queen had other political factors to consider such as safety (Cavendish, 2007).

The key driver of the growth of the city is its citizens who are highly creative and quick to see opportunities. For instance, later on the citizens realized that they could get higher returns if they saw the timber. This new need for the timber made this way also led to the need for such sawing machines. The growth of this business was so fast and wide that its sawing firms were the biggest at the time. 

As time moved, newer technologies emerged for construction. The invention of the use of steel slowly killed the timber industry. The other reason for the decline is that the Great Britain stopped making subsidies in the market. As we know, industries can be changed with time and collapse if there is no quick solution or desire to survive. 

When it comes to railway transportation, an electric railway system was built in 1893. This was supposed to replace the hors cars. This form of rail way system was owned privately and served to interconnect the city. It is a few years earlier that the city had become part of the larger railway network that connected the continent. This was possible when the company joined the Pacific Express.

Towards the end of the 19th century, Ottawa was crisscrossed with many railway lines owned by different companies. This hugely helped ease the transportation within and also towards outside the city. One of the biggest challenges that the city has faced both economically and socially is the fire that razed most of the city in 1900.  The fire brought down many residential buildings and also killed may highly skilled staff. Fire also razed down the central part of the parliament buildings, thus forcing a relocation for the short run as repairs were underway. 

To improve the physical appearance of the city, parliament empowered the National Capital Commission that would take charge of lands and to effect many changes in the city. Among the changes were the removal of railway stations from the city center and the relocation of large centers of industry to areas that have more space. The commission was also empowered to make any changes that might make the appearance of an individual (Department of Economic Development and Innovation, 2014).

Recent times

The economy of Ottawa, as pointed out earlier relies on the technology to a very large extent. In modern times, the highest paying and best jobs are offered from by these two sectors. When evaluated when combined, they contribute over 37% to the GDP of Ottawa. For such high performance, the median family income is very high. For instance in 2004, the figure was $73,500. Unlike other cities in Canada, Ottawa has a more stable economy. This is because most of the jobs offered by the government do not change with the situation in the market. unlike the private sector that deals with retrenchment when times are tough, the government retains its employees until the economy is stable again (Sorensen & Hutchins, 2015).

Since the country now has an economy that is structured like most developed countries, any major trends in the global market and international economy also affects its economic performance. For instance in 2001, the city experienced a slow turnaround in the technology sector due to global trends. This led to the low job creation and less revenue. 

The economy of the city, contrary to many others in the world has a huge benefit from the rural sector. Per annum, the city gains about $1 billion from the sector. Other than farm produce and dairy products, the city also gains from other activities in the rural sector such as construction, mining and forestry. The rural sector has grown in its ability to employ by a very huge margin. For instance, it expanded by 18% in the 5 years between 1996 and 2001.

The agricultural sector in Ottawa utilizes about 300,000 acres of land. The city not only values the farming activities but also believes in the preservation of the land as a useful resource. The quality of the farm land also contributes to the beauty of the countryside. The agriculture sector complements good tourism (Helmer, 2015).

In the past the economy of Ottawa was considered recession proof. However, with the changes in modern times, the city has been experiencing problems. The federal government has been cutting on hiring and payment in order to adjust to tough economic times. In 2015 for instance, the economy was not very strong in terms of growth. This means that it pushes people to want to choose what to purchase. For such reasons, some industries considered luxurious like music performed even more poorly because people opt to go for what they need first then what they want (Sorensen & Hutchins, 2015).


As we have seen in the sections above, Ottawa is a great city to live in, work or visit. It has met the international standards for a developed city that has all the services that should be in a modern city. We have also seen that it is a much more stable city than most of Canada’s cities due to innovation and job security from the government employment. Just like every city that is stable in economy, Ottawa has undergone many challenges and overcame them successfully. As seen, the policies made by the government are important in the development of a city, and thus a city is as good as its leaders. 


Cavendish, R. (2007). Ottawa Chosen As Canadian Capital . History Today .

CURRY, B., & McKENNA , B. (2014). Stimulus gamble: How Ottawa saved the economy – and wasted billions. The Globe and Mail.

Helmer, A. (2015). Is Ottawa still recession-proof? . Ottawa Sun.

(2014). OttawaL Economy and demographics. Ottawa.

(2015). Economic Development Update For the City of Owatta . Department of Economic Development and Innovation.

Sorensen, C., & Hutchins, A. (2015). How Canada’s economy went from boom to recession so fast. Macleans .

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