Throughout the 17th century, the Canadian fur trade was fully controlled by the French. When two French traders, Pierre-Esprit Radisson and Medard de Groseilliers, found that the Hudson’s Bay area was rich with furs, they approached the French government with the idea of setting up a trading post on the Bay. The French Secretary of State was uninterested in backing the scheme, as he opposed exploration and trapping and was trying instead to promote farming in the colonies.
Radisson and des Groseilliers were undaunted, and instead approached a group of Massachusetts businessmen with their plans. The businessmen immediate saw the potential and in turn, brought the two Frenchmen to England to raise financing for the venture.
In 1668, two ships were commissioned for exploration and trade in Hudson’s Bay. One ship was forced to return home off the coast of Ireland, but the Nonsuch continued on to a successful trading expedition throughout the winter of 1668-1669.
When the ship returned to England with its bounty of furs, a number of wealthy English merchants were fully ready to participate in the venture. They formed the Hudson’s Bay Company, and in 1670, the King of England granted them a complete monopoly over the fur trade throughout the lands surrounding Hudson Bay. The fact that those lands did not belong to the crown seemed of little consequence.
The Company proceeded to build strategic trading forts along Hudson’s Bay, securing key points at the mouths of rivers. These key ports were valuable not only because they provided access to some of the richest fur country, but the deep-water ports gave Britain a distinct advantage over the French as well. French fur traders had no nearby forts, so they were forced to paddle long distances to reach their sale points in the interior. The British could simply sail their ships straight into the Bay where they could unload their trade goods and load up on furs to bring home.
Business was hugely profitable until the late 1740s, as the HBC held a tight monopoly on the fur trade in the region. Naturally, the Company needed hundreds of employees as traders were required for expeditions deep into the Canadian interior. Most of these employees were brought from England and Scotland as indentured servants. Many of these men married native women, and while company policy forbade such unions initially, they soon allowed it and a distinct ethnic group – the Metis – was formed.
The 1750s saw the fur trade slow considerably due to the Seven Years War between France and England. When Britain won the war, they took full control of New France and the fur trade. While this should have spelled prosperity for the HBC, competition began to spring up. The North West Company was formed in 1783, spurring fierce competition. No longer could the HBC sit back and wait for the furs to arrive – both companies launched out toward the west to find new sources of fur. Eventually the feud came to an end when the British Government pressed the two companies into a merger.
As Canada received more and more settlers, the fur trade went into decline. Since it was soon unrealistic for the HBC to administrate the huge region, the British government negotiated a settlement, transferring the company’s lands to the dominion of Canada. The HBC received a hefty payment and a substantial land grant in payment; however, the company soon diversified its interests. They invested in real estate, marketing and other ventures, and due to their wise investments, the company exists to this day as one of the largest private companies in Canada.