I lived in Ottawa during my university years. Nice, calm city that you're hopefully not staying for too long in!
The standard museums and sites already mentioned are definitely worth checking out. Stop by the Byward Market downtown just northeast of Parliament Hill (10 min walk) during the day and check it out. There really isn't all that much to do there except for the Rideau Canal, Parliament Hill and museums. Things close early in Ottawa so keep that in mind, though with young kids, I can't imagine you'll be out too late anyway.