Earlier quoted context omitted.
Out of curiosity, why is Ottawa poised to bounce back, and KW poised to decline ?
KW has been/is largely fuelled by RIM/BlackBerry and the University of Waterloo. If the situation gets any worse for BlackBerry, you'll see an enormous brain drain and capital leave the area. Ottawa is the country's capital and some tech companies there are doing quite well (Shopify in particular).
As far as I am concern, Washington DC isnt the startup capital of the US, so why would Ottawa be? In my opinion government shouldn't be a driver of capital in startups, nor is it ... ?