We can confirm that this is a policy change at this location (a Hertz independent licensee). No reason was given for the change, but typically this sort of thing has to do with risk mitigation, meaning that they feel that local renters pose more of a financial risk than those flying in.
Here's the official policy for this location:
All renters will be asked to present a valid driver’s license, an additional photo ID (passport, Canadian Photo Health Card) and a valid credit card in their name. Airport rentals require an arrival and a return ticket to qualify. Off airport rental locations will no longer provide rentals to customers from out of town (100 km radius of city center). Out of town renters who arrive by air can rent with noted requirements for airport rentals.
So the actual policy change is two-fold:
1. You can't rent from the YOW airport unless you are flying in (and back out).
2. You can't rent from an off-airport location in Ottawa unless you live within 100km miles of the city center.
Odd, but we guess they get to make the rules.