Long before European traders arrived on Hudson Bay in 1682, Aboriginal groups had developed long-distance trade networks. Plains groups made expeditions to Aboriginal trading centres to the south and brought back goods to trade at smaller local gatherings. Exotic goods, even seashells, were traded from group to group. Trading rituals involved formalized speeches, pipe ceremonies, and the exchange of gifts. European traders were quickly absorbed into this system and adopted its rituals. For many years, Aboriginal groups held the upper hand. Local leaders who organized groups to travel to the posts were also middlemen and traded their goods with other groups further inland. Thus it was important for the traders to maintain good relations with these men. More importantly, European traders depended on local groups not just for furs but also for provisions. The early English and French traders developed different methods. In 1670, the Hudson's Bay Company (HBC) had been granted ownership of Rupert's Land, all the territory drained by rivers flowing into Hudson Bay. The HBC established large posts on the coast at York Factory and later at Fort Churchill. There they remained, depending on Cree, Assiniboine and Dene groups to make annual trading trips to the Bay. Traders, based in Montreal, were often organized in partnerships that sent out men to build small posts among Aboriginal groups. The French reached the mouth of the Saskatchewan River in 1741, and by the early 1750s were on the lower Red Deer River in Manitoba and below the Forks of the Saskatchewan, their furthest western post.
The French intercepted groups going to the Bay, skimming off the best furs. In 1754, the HBC began to send men inland to winter with the Cree and persuade them to continue their annual trips to the Bay. Although the French left after the Seven Years War (1756-63), English-speaking Montreal traders quickly returned guided by former French employees. By the late 1760s, these traders had returned to the Red Deer and Saskatchewan Rivers. They were so successful in intercepting Aboriginal groups traveling to the Bay that the HBC was forced to move inland, establishing Cumberland House in 1774. Traders rapidly moved up the North Saskatchewan River, while in 1778 Peter Pond was guided across Portage la Loche to the vast Athabasca country. Beginning in 1776, Montreal traders began joining forces to form the North West Company (NWC). Finally the XY Company joined in 1804, leaving only two trading firms: the NWC and the HBC.
The years between 1776 and 1821 were marked by intense, often vicious competition-especially at the hands of NWC traders, who had no central authority to control their actions. The HBC often suffered because their posts were under-manned. However, the main victims were Aboriginal people, who were often coerced into trade: they were no longer able to maintain advantageous trading conditions, and their role as middlemen largely disappeared with the establishment of small, localized trading posts. The situation was so bad that in 1821 the British government pressured the two companies to combine under the HBC. Governor George Simpson streamlined the company, eliminating many small posts in favour of several large ones. Redundant employees, often Métis, were let go - many settling at Red River. There they became involved with the annual bison hunt, supplying pemmican and, later, hides to the trade. However, the short-lived monopoly of the HBC after 1821 was broken in 1849 when Red River traders interpreted a court case as allowing them the right to trade. These free traders quickly moved west, reaching Ile-à-la-Crosse by 1862.
In 1870, Rupert's Land was sold to Canada (see Rupert's Land Purchase). In the south, the fur trade lost importance with the disappearance of the bison in the mid-1880s, the confinement of Aboriginal groups onto reserves, and the arrival of settlers. However, the trade remained important in the north, where First Nations continued to occupy traditional lands. New competing firms appeared, such as Revillon Frères, Lamson and Hubbard, the Northern Trading Company, and Stobard and Company. These either failed or were absorbed by the HBC, the last being Revillon Frères in 1936. However, independent traders continued to compete in northern communities. Then, in 1985 the HBC sold off its northern posts, ending its 300 years of fur trade in the West. The period left a complex legacy. For over 200 years the fur trade was the basic economy in the West; it resulted in the exploration of the province; it forced peaceful relations between Aboriginal groups and Euro-Canadians; it led to a further elaboration of Aboriginal plains cultures; and it resulted in the Métis nation.