With the transfer of Canada from France to England by the Treaty of Paris in 1763, new competition developed in the lands nominally held in monopoly. Scotsmen had assumed a large role in the Montreal fur trade, and their trade cut into the declining returns of the Hudson's Bay Company. Out of the combinations of these Montreal merchants grew the North West Company, which was to be the chief rival of the older company. The Hudson's Bay men were stirred out of their lethargy: Samuel Hearne founded Cumberland House on the Saskatchewan River in 1774, and thereafter the Hudson's Bay Company took a greater interest in the West.
Other difficulties beset the company. In 1782 a French naval expedition took Fort Prince of Wales, on the Churchill River, one of the most important company posts. It was returned and became Fort Churchill, but trade there and at York Factory, the other great eastern post, declined. Brisk rivalry with the Northwesters (as the traders of the North West Company were known) in the West did not turn to the advantage of the Hudson's Bay Company. Company policy apparently did not encourage exploration, and the great geographer, David Thompson, left it to join the Northwesters.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.