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Enter The Canadian Pacific Railway

Chronology of Events
15 February 1881 Canadian Pacific Railway (CPR) incorporated
21 March 1881 Ontario & Quebec Railway (O&Q) incorporated Statute 44 Chapter 44
09 June 1881 Canada Central Railway (CCR), Brockville to Mattawa, previously Brockville & Ottawa (B&O) amalgamated with CPR
17 May 1882 CPR purchases the Quebec, Montreal, Ottawa & Occidental (QMO&O) Railway from the Province of Quebec.  The line links Quebec City to Montreal to Hull, Que.  It connected to the CCR at Ottawa via a bridge across the Ottawa River at LeBreton Flats
26 July 1883 Toronto, Grey & Bruce Railway (TG&B), Toronto to Owen Sound, leased to O&Q for 999 years
30 November 1883 Credit Valley (CVR), Toronto to Galt to Orangeville, and Galt to St Thomas, amalgamated with O&Q
04 January 1884 O&Q leased to CPR for 999 years
05 May 1884 O&Q links up with TG&B, CVR from Perth, Ont to Toronto via Tweed, Peterborough

The advent of the Canadian Pacific Railway in 1881 to build the first Canadian transcontinental railway changed the status quo in Ontario.  The CPR was supposed to started in the middle of nowhere west of Lake Nippissing (around what is today North Bay).  The members of the CPR syndicate weren't dumb. 
George Stephen, President of the Bank of Montreal, his cousin Donald Smith who ultimately controlled the Hudson's Bay Company, had come to Canada years before with little in their pockets to make their fortunes.  Duncan McIntyre had made his fortune in trade in Montreal.  R.B. Angus was the General Manager of the Bank of Montreal.  James J. Hill  had a monopoly on the Red River trade through his steamboats.  Their first railway line, the St Paul, Minneapolis & Manitoba Railway, had brought these men together in business.  They had changed a money-loser into a very profitable enterprise through their sharp business skills.
In order for the CPR to succeed, the syndicate needed access to Atlantic seaports and the heartland of southern Ontario.  If they didn't succeed, their enterprise would be bankrupt. And so they started on an acquisition program of buying, leasing, or building railways in Ontario and Quebec.
In 1879, Duncan McIntyre, a member of the syndicate, gained control of the Canada Central Railway (formerly the Brockville & Ottawa) which went from Brockville on the St Lawrence River to Mattawa on the Ottawa River, with a branch line from Carleton Place to Ottawa.  The CCR was amalgamated with the CPR on June 9, 1881.  The CPR was now just a short distance from Lake Nipissing.
At the same time, through an associated company, the Ontario & Quebec (O&Q) Railway, the syndicate took over the money-losing Quebec, Montreal, Ottawa & Occidental Railway from the Quebec government on May 17, 1882.  The QMO&O traversed the north shore of the St Lawrence and Ottawa Rivers from Quebec to Montreal and Hull.  It linked up with the CCR via a bridge across the Ottawa River at LeBreton Flats in the west end (at that time) of Ottawa.  In one swoop, the CPR had connected to Atlantic ports at Brockville, Montreal, and Quebec City.  But this was only the start of the CPR empire in Eastern Canada.
The Toronto, Grey & Bruce Railway (TG&B) connected Lake Ontario at Toronto to Lake Huron/Georgian Bay at Owen Sound.  Members of the CPR syndicate had been associated with the TG&B for many years. On July 26, 1883, the TG&B was leased to the O&Q for 999 years.  The CPR had access to the markets north of Toronto and was able to transship supplies from Owen Sound via Lake Huron and Superior to Fort William/Port Arthur (today called Thunder Bay).  But this was just the start.
The Credit Valley Railway connected Toronto to Galt and St Thomas.  Through connections with the Canada Southern Railway at St Thomas, the CVR had access to American lines.  George Stephen of the syndicate had been a longtime business associate  of George Laidlaw - one of the principals of the CVR.  Through the Bank of Montreal, Stephen had rescued the CVR in time of financial difficulty.  On November 30, 1883, the CVR was amalgamated with the O&Q.
The CPR, in addition to having access to Atlantic seaports via the CCR and the QMO&O, now had a railway network in the heartland of Southern Ontario.  The problem was to now connect these two parts together.  Under the Ontario & Quebec Railway, the syndicate constructed a line from Toronto to Perth, a branchline on the Canada Central to Smiths Falls.  On May 5 1884, the O&Q linked up with the CVR and TG&B at Toronto with a line from Perth through Tweed and Peterborough.
In taking control of the Toronto, Grey & Bruce and Credit Valley Railway, then linking them with their ownership of Canada Central Railway and Quebec, Montreal, Ottawa & Occidental, the CPR had invaded the Grand Trunk's exclusive territory!!  This meant war!!  And so started a tidal wave of ruinous railway construction that didn't end until after World War I.

Map of the CPR in Eastern Canada in 1884.  The Canadian Pacific, by gaining control of a few key railway lines and linking them together through the Ontario & Quebec Railway, had established a very substantial railway network in the heartland of Ontario and Quebec. By the end of the year, the CPR faced a cash crisis - there was no more money to complete the transcontinental line.  Stephen and Smith had pledged all of their assets to build the CPR.  The government of Sir John A. Macdonald balked at lending more money to the railway. 
But fate intervened.  In early 1885, out in Manitoba (today a part of Saskatchewan), the Métis under the leadership of Louis Riel started a rebellion which resulted in the killing of settlers.  The CPR came to the rescue by offering to transport troops from Eastern Canada to the unsettled prairies - in the middle of winter.  This railway network, although not fully completed along the north shore of Lake Superior, transported Canadian troops from the east to the west to put down the Riel rebellion.  The Canadian government then rescued the cash-strapped CPR by advancing the railway $5 million.