Before European explorers arrived in Canada, the area around Ottawa was inhabited by hunters and gatherers of the Algonquian and Iroquoian peoples. In 1613 the area was visited by Samuel de Champlain, founder of the French empire in North America. In 1800, several years after the British captured Canada from the French, Philemon Wright, an American immigrant, established the first permanent settlement on the north bank of the Ottawa River. In 1826 the British government began building the Rideau Canal between the Ottawa River and Lake Ontario as a military project under the direction of Colonel John By. The project also included the establishment of a village, named Bytown in the colonel's honor. Bytown grew as a center for lumbering in the Ottawa River Valley. The area became a leading producer of lumber after Chaudière Falls (located nearby on the Ottawa River) and Rideau Falls (where the Rideau River enters the Ottawa River) were harnessed to provide waterpower in the 1850s. Bytown was incorporated as a town in 1847 and became the city of Ottawa in 1855.
In 1857 Ottawa became the capital of the Province of Canada, which included the present-day provinces of Québec and Ontario. It was chosen because it was located on the border between Québec and Ontario and was safe from American attack. Parliament buildings were constructed, and the government moved to Ottawa in 1866. When the Dominion of Canada was formed in 1867, Ottawa became its capital.