Original 28++ Canada Capital City Name. They are also very often the chief focus of economic power and, therefore, of real political. Canada's capital is the city of ottawa and is located in eastern canada. But how exactly did it manage to become the capital of each of these cities held the title of capital of canada for varying lengths of time. The capital city of canada is ottawa, which was incorporated 1855 and derives its name from the algonquin word for trade.