Section 16 of the Constitution Act, 1867

The choice of a seat of government had been a major political issue in the Province of Canada, resulting in an itinerant parliament over the course of twenty-five years, a referral of the issue to Queen Victoria, and the fall of the Canadian government in 1858.^[15]

From 1841 to 1866, the seat of government of the Province of Canada had relocated seven times, to five different cities: Kingston (1841 to 1843); Montreal (1843 to 1849); Toronto (1850 to 1851); Quebec City (1852 to 1854); Toronto again (1855 to 1859); Quebec City again (1860 to 1865), and finally Ottawa (1866).^[16] Each of these relocations had triggered significant political debates, as there were strong regional feelings concerning the location of the seat of government.^[15]

In 1857, the two co-premiers of the Province of Canada were John A. Macdonald, the leader of the Liberal-Conservatives from Canada West (now Ontario), and George-Étienne Cartier, the leader of the conservative Bleus from Canada East (now Quebec). They were convinced that the issue of the seat of government had to be removed from Canadian politics to keep the Province of Canada together, so strong were the regional loyalties. Even their own Cabinet was divided on the issue, as Macdonald admitted in the Legislative Assembly.^[17][18]

To resolve the impasse, Macdonald and Cartier proposed that Queen Victoria be asked to determine the location of the seat of government. That proposal passed in the Legislative Assembly,^[19] but was controversial. The Globe newspaper in Toronto, published by one of the leading Reform party members, George Brown, condemned the decision, saying that it amounted to a vote "to destroy responsible government by sending to Downing Street for Mr Labouchere [the Colonial Secretary] to fix the seat of government."^[20] For a short time, however, this approach removed the seat-of-government issue from Canadian politics.^[17][18]

The Governor General of Canada, Sir Edmund Head, prepared a confidential memorandum on the issue for the British government. He recommended Ottawa as a reasonable compromise between the various conteders, and also for military reasons, given its distance from the American border, unlike Toronto, Kingston and Montreal.^[21][22] The Colonial Secretary, Henry Labouchere, agreed with Head's position and recommended Ottawa to Queen Victoria. The Prince Consort, Prince Albert, also favoured Ottawa. Late in 1857, the Queen made her decision, in favour of Ottawa.^{[16][17][20][21]}

The Queen's choice did not end the dispute, and gave rise to a complicated political episode, the Double Shuffle. In the parliamentary session in 1858, the Macdonald–Cartier government introduced a motion to authorise funding to build parliament buildings at Ottawa. The opposition, led by Antoine-Aimé Dorion and George Brown, opposed the proposal, and the government was defeated in the Assembly on the issue. The Macdonald–Cartier government treated the defeat as a matter of confidence and resigned. Brown and Dorion formed a government, but within a few days, they too were defeated and also had to resign. In the interval, Macdonald and Cartier were able to find support in the Assembly and were reappointed by Governor General Head.^[23][24]

The next year, 1859, the Cartier–Macdonald government returned to the issue. This time, after a bitter debate lasting two weeks, they were able to carry the motion for the construction of the new parliament buildings in Ottawa, in an exchange for a commitment that the Parliament would sit at Quebec City until the new buildings were ready in Ottawa. Even that was not the end of the debate. There was one final attempt in the parliamentary session of 1860 to re-open the question, but this time it was defeated by a strong majority in the Assembly.^[23]

Construction of the new parliament buildings began in 1860. Progress was initially fast, but the construction was temporarily halted in 1862 because of large cost overruns. A public inquiry was held, which found various faults with the construction process, but recommended that the original architects and builders be allowed to continue the project. By the time the buildings were completed in 1865, the total cost was $2,591,760, a considerable cost overrun from the original budget of £225,000 (equivalent to $1,094,985 at the statutory conversion rate then in use).^[16][25]

The last session of the Parliament of the Province of Canada was held in Ottawa in 1866.^[26][27]

With that history of political conflict, and the cost of the new Parliament buildings, it was not surprising that the delegates to the Quebec Conference agreed on Ottawa as the seat of government.^[28] On October 26, 1864, Macdonald proposed to the Conference that Ottawa be the seat of government, "subject to the royal prerogative". The motion passed unanimously.^[29]

There are some indications that behind the scenes, the issue was not yet firmly settled.^[28] On his return from the London Conference, Macdonald stated publicly that "he had some doubts before going to England as to whether the seat of government for the Dominion would remain in Ottawa, but he was now happy to say there was no question Ottawa was confirmed as the capital of the new Dominion."^[30] The Governor General, Lord Monck, was privately grumbling over the choice of Ottawa. In a confidential letter to the Colonial Secretary, he stated that the choice of Ottawa "...seems like an act of insanity." He predicted that within four years the seat of government would move, likely to Quebec City.^[31]

Although the monarch retains the power to move the seat of government under section 16, there has not been any such proposal since the enactment of the Constitution Act, 1867.^[22]

Unlike other federations, Canada does not have a specially designated capital area under the exclusive jurisdiction of the federal government. Municipalities are under provincial jurisdiction, through section 92(8) of the Act. The city of Ottawa is in the province of Ontario and is incorporated under Ontario law.^[32][33] The federal government also has a considerable presence in the office towers of the city of Gatineau, located across the Ottawa River, but Gatineau is in the province of Quebec and is incorporated under Quebec law.^[34][35]

There is no equivalent to the District of Columbia in the United States, nor the Australian Capital Territory in Australia.^[36] One Father of Confederation, John Hamilton Gray of New Brunswick, while praising the choice of Ottawa, stated that the lack of a federal district under the control of Parliament was a mistake.^[37]

The federal Parliament has passed a statute to create the National Capital Commission, but that federal legislation does not oust Ontario jurisdiction over Ottawa, nor Quebec jurisdiction over Gatineau.^[32][38][39] The Supreme Court of Canada has held that the federal Parliament has some legislative jurisdiction over the area around the seat of government, but the extent of that power is not clear.^[36][40]

The mixture of federal, provincial and municipal jurisdiction over Ottawa and Gatineau became an issue during the Canada convoy protest in 2022. The commissioner appointed to review the use of the Emergencies Act by the federal government commented on the overlapping jurisdiction, and stated that it may have contributed to the slow response to the protests.^[41]

Section 68 of the Act defines the seats of government of the four original provinces of Canada: Toronto for Ontario; Quebec City for Quebec; Fredericton for New Brunswick; and Halifax for Nova Scotia.

Section 92(8) of the Act provides that the provinces have exclusive jurisdiction over municipalities.