For nearly 250 years, from the early 17th to the mid-19th centuries, the fur trade was a vast commercial enterprise across the wild, forested expanse of what is now Canada. Sustained primarily by the trapping of beavers to satisfy the European demand for felt hats, the intensely competitive trade opened the continent to exploration and settlement, financed missionary work, established social, economic and colonial relationships between Europeans and Aboriginal people, and played a formative role in the creation of Canada.

Fishing, Furs and Christianity

The fur trade began as an adjunct to the fishing industry. Early in the 16th century fishermen from northwest Europe were taking rich catches of cod on the Grand Banks off Newfoundland and in the Gulf of St Lawrence (see History of Commercial Fisheries). Drying their fish onshore took several weeks, during which time good relations had to be maintained with Aboriginal people, who were eager to obtain metal and cloth goods from the Europeans. What they had to offer in exchange were furs and fresh meat. The fishermen found an eager market in Europe for the furs and made high profits.

When the wide-brimmed felt hat came into fashion later in the 16th century, the demand for beaver pelts increased tremendously. The best material for hat felt was the soft underfur of the beaver, the strands of which had tiny barbs that made them mat together tightly.

The first French traders established permanent shore bases in Acadia, a post at Tadoussac, and in 1608 a base at Québec to exploit the trade more effectively. The following year the Dutch began trading up the Hudson River and in 1614 established permanent trading posts at Manhattan and upriver at Orange (what is now Albany, New York). This activity marked the beginning of intense rivalry between two commercial empires. During these years the number of traders flooding into the St Lawrence River region, and cutthroat competition among them, greatly reduced profits. In an attempt to impose order the French Crown granted monopolies of the trade to certain individuals. In return, the monopoly holders had to maintain French claims to the new lands and assist in the attempts of the Roman Catholic Church to convert Aboriginal people to Christianity.

In 1627 Cardinal Richelieu, first minister of Louis XIII, organized the Compagnie des Cent-Associés to put French territorial claims and the missionary drive on a firmer footing. Missionaries were sent out: in 1615, four Récollets, and in 1625 the first members of the powerful Society of Jesus (Jesuits), arrived at Québec. A mission base, Ste Marie Among the Hurons, was established among the Huron near Georgian Bay, but the Huron were more interested in the trade goods of the French than in their religion. And it was fur-trade profits that sustained the missionaries and allowed the company to send hundreds of settlers to the colony. In 1642 Ville-Marie [Montréal] was founded as a mission centre. In 1645 the company ceded control of the fur trade and the colony's administration to the colonists. (see Communauté des habitants). Unfortunately, they proved to be inept administrators, and fur-trade returns fluctuated wildly. Finally, after a desperate appeal by the colonial authorities to Louis XIV, in 1663 the Crown took over the colony.

French Control and French Profits

The main staple of the trade was still beaver for the hat industry. The Ministry of Marine (see Ministère de la Marine), responsible for colonial affairs, leased three overseas enterprises -- the West Indies plantation trade, the African slave trade, and the marketing of Canadian beaver and moose hides -- to the newly formed Compagnie des Indes occidentales, which was in reality a crown corporation. All permanent residents of New France were permitted to trade for furs with Aboriginal people, but they had to sell the beaver and moose hides to the company at prices fixed by the Ministry of Marine. All other furs were traded on a free market; thus the trade was not a monopoly, but the law of supply and demand had been suspended for beaver and moose hides.

Jean-Baptiste Colbert, the French minister of marine, hoped to see the Canadian economy diversified to produce raw materials for French industry, particularly timber, and minerals and foodstuffs for the West Indies plantations. Thousands of emigrants were shipped to Canada at the Crown's expense to bring the land into production.

Colbert discovered that a sizable proportion of the young men did not remain on the land but disappeared for years to trade with Aboriginal people in distant villages (see Coureurs de bois). The main reasons for this phenomenon were the assured profits in the trade and the imbalance of the sexes in the colony, which was so great that until about 1710 only about one man in seven could hope to find a wife -- a necessity on a farm. In the interior, however, the traders quickly formed alliances with Aboriginal women, whose economic skills helped the French adapt to wilderness life.

By 1681 Colbert was forced to acknowledge the pull of the fur trade, and he inaugurated the congé system. Each year up to 25 congés (licences to trade) were to be issued by the governor. Each congé allowed three men with one canoe to trade in the West. It was hoped that the Canadians would wait their turn for a congé, thus leaving the colony only 75 men short each year. But the new system did little to reduce the number of men away from the settlements (most of them illegally), and the amount of beaver pouring into Montréal continued to increase astronomically. By the 1690s the Domaine de l'Occident (Company of the Farm), which had been obliged to take over the beaver trade in 1674 from the defunct Compagnie des Indes Occidentales, was complaining of a huge glut. In 1696, in desperation, the minister of marine gave orders to suspend the beaver trade, to stop the issuing of congés, and to abandon all the French posts in the West, except Saint-Louis-des-Illinois.

War and Rivalry With England

The order to abandon the western trading posts (to slow the migration of men into the beaver trade, and to reduce the glut of pelts) was given while England and France were at war and the Canadians were engaged in a desperate struggle with the English colonies and their Iroquois allies. The governor and intendant (French administrator) in Québec protested vigorously, declaring that to abandon the posts in the West meant abandoning their Aboriginal allies, who would then go over to the English. New France would be doomed.

In addition, the English had been established since 1670 at posts on the sub-Arctic coast of Hudson Bay (see Hudson's Bay Company, HBC), and the western posts were essential to fend off that competition. The Canadian Compagnie du Nord had been founded in 1682 to challenge the HBC on its own ground, but it was a failure. The minister of marine was obliged to rescind his drastic orders and the beaver trade resumed in spite of the over-supply, for purely political reasons.

In 1700, on the eve of new hostilities, Louis XIV ordered the establishment of the new colony of Louisiana on the lower Mississippi River, plus settlements in the Illinois country and a garrisoned post at Detroit. The aim was to hem in the English colonies between the Allegheny Mountains and the Atlantic. This imperialist policy depended on the support of the First Nations. The fur trade was used to maintain their alliances and loyalty.

The Voyageurs

In 1715 it was discovered that rodents and insects had consumed the glut of beaver fur in French warehouses. The market immediately revived. As an item on the balance sheet of French external trade, furs were minuscule, and their share was shrinking proportionately as trade in tropical produce and manufactured goods increased; however, the fur trade was the backbone of the Canadian economy.

Unlike the HBC with its monolithic structure staffed by paid servants, in New France the trade was carried on into the early 18th century by scores of small partnerships. As costs rose with distance, the trade came to be controlled by a small number of bourgeois, who hired hundreds of wage-earning voyageurs. Most companies consisted of three or four men who obtained from the authorities the lease on the trade at a specific post for three years; all members shared profits or losses proportional to the capital subscribed. Trade goods were usually obtained on credit, at 30 per cent interest, from a small number of Montréal merchants who also marketed the furs through their agents in France. The voyageurs' wages varied from 200 to 500 livres if they wintered in the West. For those who paddled the canoes westward in the spring and returned with the autumn convoy, the usual wage was 100-200 livres plus their keep (about double what a labourer or artisan would earn in the colony).

Westward Expansion

Between 1715 and the Seven Years' War (1756-63) the fur trade expanded greatly and served a variety of purposes — economic, political and scientific. Educated Frenchmen were keenly interested in scientific inquiry, and government members, eager to discover the extent of North America, wished a Frenchman to be the first to find an overland route to the western sea (see Northwest Passage). Commissions were granted to senior Canadian officers such as Pierre Gaultier de Varennes et de La Vérendrye to discover that route. They were given command of vast western regions (some of which overlapped territory claimed by the British), with sole right to the fur trade. Out of their profits they had to pay the expenses of maintaining their posts and sending exploration parties west along the Missouri and Saskatchewan rivers.

The Crown thereby made the fur trade pay the costs of its pursuit of science, and also maintained control over both its subjects in the wilderness and its alliances with the First Nations in order to exclude the English. By 1756, when war with England put a stop to exploration, the French had reached the foothills of the Rocky Mountains. Warfare between the Blackfoot and Cree prevented further advances.

Hudson's Bay Company and Other English Traders

Throughout this period there was keen competition between the French Canadian traders and the HBC, with the Canadians taking the lion's share of the trade. They had many advantages: they controlled the main waterways throughout the West; they had a sure supply of the birch bark needed for canoes (something that the Anglo-Americans and the HBC men both lacked); many of their trade goods were preferred by the Aboriginal people; and they had good relations with the First Nations, with whom they had developed extensive kinship ties. Attempts by the English of the Thirteen Colonies to obtain more land for settlement angered the Aboriginal people. The French did not covet Aboriginal lands, but were determined to deny them to the English.

The HBC traders made no real attempt to push their trade inland. Instead, they waited in their posts for Aboriginal people to come to them. The First Nations were astute enough to play the English and French against each other by trading with both. The French dared not try to prevent Aboriginal people from taking some furs to the Bay, but made sure to obtain the choice furs, leaving only the bulky, poor-quality ones to their rivals.

In the St Lawrence region, New York and Pennsylvania traders made little attempt to compete with the Canadians. Instead, they purchased furs clandestinely from the Montréal merchants. In this way the Canadians obtained a good supply of strouds (coarse English woollen cloth), a favourite English trade item. The illicit trade between Montréal and Albany also removed any incentive the New York traders might have had to compete with the Canadians in the West.

When the Seven Years' War began, the fur trade continued out of Montréal. The First Nations people had to be kept supplied, but the volume of exported furs steadily declined. Within a year of the French capitulation at Montréal in September 1760 and the end of New France, the trade began to revive, largely supported by British capital and Canadian labour.

Rise of the North West Company

At the time of the Conquest, over the period 1759-60, two systems dominated the commercial fur trade of the northern half of the continent: the St Lawrence-Great Lakes system, based at Montréal and extending to the upper reaches of the Mississippi River and its major northern tributaries, as well as to the prairies and the southern portion of the Canadian Shield; and the Rupert's Land system, which theoretically covered the whole region draining into Hudson and James Bays.

The St Lawrence-Great Lakes system, developed by the French, had come to be served by the en dérouine (itinerant peddling) pattern of trade - in which the trade, dominated by many small partnerships, was conducted by parties of a few men sent out to do business with the First Nations in their own territory. The Rupert's Land trading system, by contrast, had not evolved in the same manner; in 1760 the HBC's employees still followed the practice of remaining in their coastal "factories" (major trading posts), awaiting the arrival of Aboriginal people to trade.

After the Conquest, Anglo-Americans (Yankees, or Bastonnais), and English and Highland Scots merchants supplanted the Canadian bourgeois and the agents of French merchants at Montréal. The new "pedlars" forged a new commercial link with London. The resulting upsurge in activity in Montreal disturbed the HBC's "sleep by the frozen sea": the success of its new rivals forced the company to alter its coast-factory trading policy, and in 1774 the HBC penetrated inland from the Bay to found Cumberland House, close to the Saskatchewan River. For their part, the pedlars learned that co-operation among themselves, rather than competition, was the road to commercial success.

The resulting North West Company (NWC) rose rapidly to a position of dominance by gaining a de facto monopoly of the trade in the fur-rich area around Lake Athabasca. Staple fur (beaver) and fancy furs (mink, marten, fisher, etc), unsurpassed in quality and number, assured handsome profits in spite of the high costs of the necessarily labour-intensive transportation system, the canoe brigade. The annual dash of brigades from Fort Chipewyan to Grand Portage (later to Fort William) on Lake Superior created much of the romantic image of the fur trade. To maintain its Athabasca monopoly the NWC competed, at a loss if necessary, with its opponents on the Saskatchewan River, around Lake Winnipeg, and north of the Great Lakes. On the North Saskatchewan River, the rival companies leapfrogged westward past each other's posts in an attempt to gain a commercial advantage with First Nations.

In all regions, small trading parties journeyed with supplies of trade goods to waylay Aboriginal people traveling to rivals' posts and, when necessary, to force them to trade. In this competition the HBC appeared disadvantaged in spite of its having a major shipment post, York Factory on Hudson Bay, much closer to the fur-gathering areas than was the NWC's trans-shipment point of Montréal.

The HBC lacked personnel and equipment equal to the tasks of inland travel and trade. Not until the 1790s did the HBC evolve the York Boat brigade as an answer to its rival's canot de maître and canot du nord. Even then, improved equipment and personnel were not sufficient to turn the commercial tide in the company's favour.

Montréal agents such as Simon "The Marquis" McTavish and his nephew and successor William McGillivray shrewdly directed the NWC's affairs, but much of the company's success was due to the élan of its officers and employees (engagés). Wintering partners participated in decision making and enjoyed the profits of the trade. Unlike the HBC, the NWC permitted all ranks to take Aboriginal wives, a policy that resulted in a certain stability and a sizable Métis population by the early 19th century.

In 1789 Alexander Mackenzie carried the NWC's flag to the Arctic Ocean, and in 1793 he reached the Pacific Ocean overland. Later explorers such as Simon Fraser and David Thompson opened up the fur lands west of the Rocky Mountains. The signing of Jay's Treaty in 1794 ended the southwest trade, and a new rival, the XY Company, appeared in 1798. But the NWC met its challenge and in 1804 absorbed this upstart.

Hudson's Bay Company Triumphs

It was the revitalization of the HBC beginning in 1810 that ultimately defeated the NWC. That year, the Earl of Selkirk's decision to establish a settlement in HBC territory led him to purchase sufficient stock to place four friends on the HBC's seven-man governing committee. These men, new to the company, emphasized efficiency in the trading process as the means to reduce costs and turn from loss to profit. Success in this endeavour led the company to attempt to invade the Athabasca country in 1815. Poor planning by the expedition's leader and the NWC's influence with the Aboriginal people in the region caused as many as 15 men to die of starvation. But the HBC, undaunted, returned a few months later and successfully challenged the NWC monopoly.

The governing committee gave Selkirk's Red River Colony assistance and co-operation, although officers in the region were unenthusiastic. The NWC saw the settlers as supporters of their newly revitalized commercial rival, and convinced the local Métis, who had settled the region earlier, that their lands were threatened. Commercial conflict erupted in violence when the colony's governor and some 20 other settlers and HBC servants died in the Seven Oaks incident on 19 June 1816; the Métis lost only one man.

Such occurrences led the British government to demand that the competing fur companies resolve their differences. To this end the government passed legislation enabling it to offer an exclusive licence to trade for 21 years in those areas of British North America beyond settlement and outside Rupert's Land. In 1821 the two companies created the "Deed Poll," a document which outlined the terms of a coalition between them, detailed the sharing of the profits of the trade between the shareholders and individual officers in the field, and explained their relationship in the management of the trade. It was in this manner as well as in the sharing of profits that elements of the NWC survived in the new HBC, although what was a coalition in name became absorption by the HBC in fact when, in 1824, the board of management was eliminated. A majority of officers working for the HBC after 1821 were former Nor'Westers.

Simpson Consolidates Fur Trade Empire

Commercial agreements between the two separate companies and the support given by government legislation and proclamation could not hide the NWC's defeat. The victorious HBC once again sought to increase its efficiency. Under the direction of Governor George Simpson, the "Little Emperor," the HBC achieved undreamed-of profits. But such profits required a constant monitoring of costs and a constant search for savings, as well as a policy of sharp competition with rivals in border areas. Through the company's policies and the actions of its personnel, the inhabitants of the old North-West were exposed to the influence of changes wrought in Britain by the Industrial Revolution, including the creation of workforces dependent on company employment.

Simpson clearly saw the importance of providing support to Aboriginal people's hunting and trapping – which supplied the furs that sustained the HBC's fortunes. In times of adversity the company offered medical services and sufficient supplies and provisions for the trapper and his family to survive. Yet in systematizing these services Simpson's policies led Aboriginal people into an increasingly dependent relationship with the HBC. The Plains Aboriginal people, while the buffalo hunt was still possible, could be independent of the company's services, but for others the new reality was increasingly economic dependence.

Simpson's reforms allowed HBC expansion along the Pacific coast, northward to the Arctic, and into the interior of Labrador, which had been largely ignored until then. Such a vast fur domain attracted rivals. Simpson's fundamental strategy was to meet competition in the frontier areas to preserve the trade of the interior for the HBC. On the Pacific coast he reached an agreement with the Russian Fur Company permitting the HBC to pursue the maritime trade and successfully challenge the pre-eminence of the Americans. South and east of the Columbia River, he encouraged expeditions to trap the region clean in a "scorched-earth" policy that left no animals to attract American "mountain men" or trappers. In the Great Lakes area he licensed small traders to carry competition to the territory of the American Fur Company, eventually causing it to abandon the field for an annual payment of £300.

Farther east, the opponents were more difficult to dislodge. The King's Posts, a series of posts north of the St Lawrence originally belonging to the French king, had been granted in 1822 to a Mr. Goudie of Québec City; and along the Ottawa River, lumbering provided bases for competition to arise. Yet the company vigorously pursued its competitors in all the frontier areas, sustaining its monopoly of the trade in Rupert's Land and in the licensed territories to the north and west. Even when, in the 1830s, silk replaced felt as the favoured raw material in the manufacture of hats and beaver lost its value as a staple fur, the company maintained a profitable trade emphasizing fancy fur. Instead, it was settlement, not commercial rivals, that presented the biggest challenge to the company.

The Challenge of Settlement and the End of the Trade

West of the Rocky Mountains, American settlers succeeded where their predecessors, the mountain men and the ships' captains, had failed. As a result of the Oregon Treaty of 1846 the HBC retreated north of the 49th parallel of latitude. To the east, at Red River, the HBC met the challenge of free traders by charging Guillaume Sayer and three other Métis in 1849 with violation of the HBC monopoly. Although the company won a legal victory in the courtroom, the community believed that the free traders had been exonerated. In Lower Canada the company acquired the lease for the King's Posts in 1832, but the northward march of lumbermen signalled the lessening importance of the fur trade in this region. Simpson countered brilliantly by making his company an important supplier of goods needed by the lumber crews.

When the geographical isolation of the West was breached in the 1840s, forces other than the fur interests became involved in opening the "Great Lone Land." Roman Catholic and Anglican missionaries who had appeared earlier now penetrated to the heart of the continent. They were followed by adventurers and government expeditions (see the Palliser Expedition) seeking resources other than fur: timber, territory, and scientific knowledge. Simpson's death in 1860 and the sale in 1863 of the HBC to the International Financial Society, a British investment group that saw settlement as a source of profits, marked the beginning of the end of the historic fur trade.

In 1870 the HBC's vast territory in the West was transferred to Canada, and what had been a trickle of settlers coming from Ontario became a flood. As settlement spread north and west, the HBC and rival free traders intensified the northward push of the trade, and eventually established enduring trading contacts with the Inuit.

In the face of competition and the presence of the Canadian government, the HBC reduced the support services that had been a part of its trading relationship with the First Nations and had buffered Aboriginal people against the swings of fur-market demands in western Europe. In the 20th century, fortunes in the fur trade came to reflect the swings of the market and the advent of fur farming (see Fur Industry). Increasingly Aboriginal people looked to the missions and even more to the government for support in times of adversity. This shift culminated in the granting of family allowance, schooling and pensions after the Second World War, and marked the end of the historic fur trade. Fur trapping continues as a cash crop in frontier areas, but as a way of life it is confined to a few northern areas.

Historically, the fur trade played a singular role in the development of Canada. It provided the motive for the exploration of much of the country and remained the economic foundation for western Canada until about 1870. The fur trade also determined the relatively peaceful patterns of Aboriginal-European relations in Canada. A central social aspect of this economic enterprise was extensive intermarriage between traders and Aboriginal women, which gave rise to an indigenous fur-trade society that blended Aboriginal and European customs and attitudes.