On your front yard part, your neighbor has to build the fence (assume 6 - 7 feet in height) inside their own property line to follow the Ottawa city bylaws.
•The maximum height for fences on residential properties is 213 centimetres (7 feet),
with the exception of the front yard for which the maximum fence height is 1 meter (3.28 feet).
http://ottawa.ca/en/residents/laws-licenses-and-permits/laws/fences
Also you may ask your neighbor to check the bylaws as well. If the retaining wall (in their backyard part) is over 1.5m (as you said), they should be chain-linked for safety reason.