The Metis Nation, in partnership with trading firms in Montreal, established their own company The NorthWest Trading Company in 1779. It was more convenient for the Indians of the northern forest to trade with the Nor'Westers who were closer to them than to have to journey to the Hudson's Bay. The Northwest trade route began in Montreal and proceeded along the Ontario-Minnesota border waters to the Lake of the Woods, down the Winnipeg River to Lake Winnipeg following the river system to the far Northwest. The NorthWest Company did not recognize the monopoly claimed by the Hudson's Bay Company in Rupert's Land, and the Hudson's Bay Company had no way to enforce it. Consequently, trade with the Hudson's Bay Company declined dramatically.

The next 25 years saw the Hudson's Bay Company move still further inland in order to keep up with the NorthWest Company. Expansion in the west followed a distinct pattern: the NorthWest Company would build an inland trading post, and the Hudson's Bay Company would follow building their fort adjacent to the NorthWest Company's. Thus the two companies essentially leapfrogged up the river systems of western Canada to the Rocky Mountains. The expansion reached the Rockies by the 1800s. The NorthWest Company continued across the Rockies: sending explorers and building posts within British Columbia and Washington State. North West Company Explorers included Alexander Mackenzie, Simon Fraser, David Thompson, and Duncan McGilvery. These men ultimately traced the entire lengths of the Saskatchewan, Churchill, Athabasca and Peace rivers to their sources, and the Fraser and Columbia rivers to the Pacific. They also discovered passes through the Rockies; and followed the Slave and McKenzie rivers to the Arctic. The Hudson's Bay Company was not competing well with the North West Company in this period. By 1795, their share of the fur harvest was down to one-fifth that of the North West Company.

Although the NorthWest Company was the more successful of the two competitors in this period, the Hudson's Bay Company still had one great advantage: control of the port at Hudson's Bay. The NorthWest Company was based in Montreal: twice the distance from the far west and the rich Athabasca country than The Hudson's Bay Company. There were various attempts by the NorthWest Company to get control of the Hudson's Bay route. It attempted to buy out the Hudson's Bay Company in 1804. In 1805 it offered the Hudson's Bay Company two thousand pounds for the right to use the route. In 1808 McKenzie tried to buy control of the Hudson's Bay Company by purchasing the shares owned by Lord Selkirk. However, Lord Selkirk was planning to establish a colony at Red River, and did not sell the shares to Mckenzie.

The Hudson's Bay Company was the established authority in the Northwest and set up the Council of Rupert's Land and the Council of Assiniboia as the appointed governments of the region. Although they held power in Rupert's Land from 1821 to 1869, they had little local or indigenous involvement. Their main function was to implement the policies of the Hudson's Bay Company in the region. The Metis struggled continually throughout this period of time with these appointed governments and felt strongly as a nation of people that these councils had no jurisdiction over them.

The Metis were employed by both the Hudson's Bay Company and the NorthWest Company. Metis people began to settle along the Assiniboine and Red Rivers. In 1811, a major shareholder in the Hudson's Bay Company, Lord Selkirk requested and received land for settlement. It included 116,000 square miles much of which is now Southern Manitoba. With the arrival of settlers in 1812 tensions began to surface and the Metis asserted their rights within the region.

By 1800, the Metis had consolidated themselves as a cultural group on the western prairies. The encroachment by Lord Selkirk in 1812 was not taken lightly, due mainly to the rules and laws that England, through the Hudson's Bay Company charter, was trying to implement. In the previous 20 years or so, the Metis had diversified their economy and had begun the processing and selling of pemmican to the fur trade and the fledgllng United States of America. They resented the imposed dominion of the Hudson's Bay Company on their industry. The Hudson's Bay Company tried to impose restrictions on the pemmican trade in 1814, which brought about a huge clash between the Metis and the newly arrived Lord Selkirk colonists. The struggles of these years culminated in 1816 when the Governor and 20 men from Lord Selkirk's Red River Colony fought a battle with the Metis, led by Cuthbert Grant, at Seven Oaks.

Both companies suffered from a depressed fur market in Europe created by the Napoleonic Wars. The only solution to the problem of this competition lay in the union of the two companies. Numerous attempts were made during the early 1800s, when on March 26, 1821, the companies merged under the name "Hudson's Bay Company". The terms of amalgamation were set out in an act of British Parliament. The new company adopted many of the strongest features of the NorthWest Company. (Note the democratic influence the Metis had in this transformation.) Officers, Chief Factors, and Traders became partners with 40% of the shares, while the apprentice clerks could look forward to a share of the profits upon promotion to the rank of "Commission Gentlemen". The 40% was divided into 85 portions: 25 Chief Factors received 50 portions, 28 portions went to Chief Traders, and 7 portions were set aside as a retirement fund for Commission Officers. In addition, the act not only gave the Hudson's Bay Company monopoly control over the original charter grant (all lands draining into the Hudson's Bay), but extended this monopoly to include the Pacific slopes and the Arctic. Click here to see a map of fort locations.

The profits were so large from the fur trade with many nations vying for their share. On to the American involvement.