I think the CNN headline clearly states the obvious. The capital was in lock down, the streets were cleared, people didn't know what was happening, and they were terrified after hearing gunfire. Is the word "terrified" what you are objecting to? Sounds too much like terrorism huh?

Steve - the painting of the million or so people who live in Ottawa, as opposed to a few hundred people on Parliament Hill, as terrified is the point here. Saying the whole city was terrified is simply purple prose (the whole city was not in lock-down, just Parliament Hill, and eventually the downtown area). US coverage of this, as most breaking news stories, was sensationalist, and often made errors of fact in their haste to present "breaking news" first. The CBC's coverage was exemplary - factual, measured, and above all, avoiding speculation, or specifically identifying it as such. Factual and measured indeed described most (though certainly not all) of the coverage on Canadian news networks and press sites. It was a marked contrast from what I've seen on US broadcast and cable news networks, during the Boston Marathon bombing coverage, for example. Measured and fact-based coverage - who knew that could be a purpose of news agencies, as opposed to hyping fear (and their brand)? It’s the sort of thing that helps to remind there are still some meaningful differences between Canadian and American culture. Even on social media, I was gratified to see that when people were making speculative or Islamophobe comments, others were quick to chime in with messages of “let’s get the facts, be calm, let’s avoid jumping to judgment.”

It's a shame I can't say the same for our neo-con Prime Minister, who has seized on this event, as well as the attack on two soldiers earlier in the week near Montreal, as an opportunity to ramp up the rhetoric about “fighting terrorists here and abroad.” Even as the early facts seem to point to both these men being Canadian born, loners, and their actions more in line with other attacks on authority figures by deranged and paranoid young men, such as cop-killer Justin Leblanc in Moncton a few months back. Of course, now the PM has to sell the dubious notion that Canada can do some good by bombing the hate out of those ISIL barbarians in the Middle East…

Back to the topic at hand, accurate and reasoned reporting is why I've become a regular here at the Bradblog, because it has always been the case that Canadians do well to pay attention to American events and trends - but unfortunately, the mainstream American media isn't a great source of information. If there isn't a angle of fear! threat! chaos! to sell a story, the main focus seems to be on celebrities and gossip (Rene Zelleweger doesn't look the same at 45 as she did at 25!).

It would have been smarter to have spelled the headline "Capitol"

It would have indeed made the message more accurate, Steve. But I doubt the mistake was unintentional.
American broadcast/cable news sources have steadily slid towards "infotainment" for at least two decades that I've been noticing (it could be argued Fox News Network cannon-balled into the infotainment end of the pool from the start, and has never left the shallow end). Perhaps it comes from competing for attention with Hollywood TV and movies, which excel in drama and action, not so much in narrative and plot/character development. In any case, I don't think I'm alone in thinking Americans are increasingly ill-served by their "fourth estate".

CBC headline is more to the point rather than emphasizing the obvious. It's ironic that CBC wants to immolate CNN as in Canada's News Network.