Do ask the University though how easy it would be to transfer. If it would be uncertain then go for Ottawa otherwise Waterloo is better in almost every aspect for Engineering.
http://www.macleans.ca/education/best-engineering-universities-in-canada-2018-ranking/
Thanks for your response. Unfortunately, the situation isn't as clear cut for me as it would seem. The area I'm in requires me to get a PhD to get anywhere substantial and I'm interested in a PhD personally too. Waterloo is offering me a spot in MEng which is a terminal degree - no PhD after that. I can transfer next year but it depends entirely if a professor would accept me. That's a big if for me and I don't know if I can base my future on just a school's reputation. I don't know if it's particularly true that a better reputed school will open more doors for me because the one universal advice given to me is
"don't go to a particular school just for reputation. the quality of the work you produce will triumph over any school listed on a resume" - and I feel that is true because the papers I publish and thesis I produce should speak much more than where I went to. And this probably even more important if I'm considering a PhD after my degree.
Secondly, the 'fit' i.e. what I want to research is much more inline at Ottawa than it is in Waterloo but I have the ability to find almost anything interesting so this is not a deal breaker for me.
Third, most, if not all, rankings are completely flawed. While I concede that Waterloo has a better reputation in engineering & computer science, most rankings don't even mention if they are listing for undergrad or graduate school. And rankings are further confusing because I can easily provide you with a couple that list Ottawa engineering at a decent #3 and #6. Further, the area I'm interested in, has its breakthroughs come from UBC and UofT's CS departments but the breakthroughs were from a PhD student in UofT and a professor who doesn't even supervise at UBC!
A professor at Waterloo found my resume interesting but his team for the year was full. He asked me to stay in touch for the next year if I wanted. I will email him Monday to inquire if he would take me on next year. If he says yes then the equation changes somewhat - the fact that the research at uOttawa is more interesting is still true.
Your point about study permit being easier for better school - yes, definitely so but my guess is that it probably levels off after a certain point.
What would you say about my assessment?