The North West Company, created in 1787 from an amalgamation of several independent Montreal traders, controlled the western fur trade for several years, much to the chagrin of its great trading rival, the Hudson's Bay Company. With a network of posts stretching to the Pacific Ocean, the North West Company laid the foundation for western settlements. As a company it was a great success, accumulating wealth by exchanging the raw materials of the West for imported and processed goods from central Canadian centres.

Yet the daily fur trade depended most on the efforts of the voyageurs, engagés, and winterers who ventured west. It has been said that the western fur trade was developed literally on the backs of the voyageurs. These men  -  French Canadians, French and English Métis, and Indians  -  worked long hours for low wages, carrying goods over thousands of miles and wintering in desolate, unfamiliar, and at times, hostile territory. But eventually this became their life and many of the traders put down roots, having relationships with and often marrying Indian or Métis women "à la façon du pays." In contrast to the policy of the North West Company, mixed relationships were encouraged by the Hudson's Bay Company for business reasons. In the Hudson's Bay Company's view, not only could these Indian and Métis women help with the work but the familial and tribal connections they brought with them smoothed relations between traders and Indian groups. These "women in between" often experienced a rise in prestige and increase in political power and personal security because of their attachments to European fur traders. While the Hudson's Bay Company may have been interested only in increasing the numbers of furs and turning better profits, more personal considerations often dictated the relationships between European traders and Aboriginal women.

While the North West Company experienced great success probing farther inland and building posts, the Hudson's Bay Company continued to focus its efforts on inland posts along the Red, Assiniboine and Saskatchewan River systems. Sometimes within a few miles of each other there would be posts belonging to the North West Company, the Hudson's Bay Company, and an independent (often American) trader. Interestingly, it was common practice for the two major companies to build key posts close together and compete for the Indians' business. However, such duplication merely reduced the profits of both.

The late-1700s and early-1800s were the greatest era for the North West Company. After the explorations of Alexander Mackenzie, Simon Fraser, and David Thompson, the areas of present-day western Alberta and British Columbia were gradually becoming more well-known and the maps of river systems, lakes, and mountains more reliable. In turn, the North West Company extended itself farther westward, building more and more posts. Employing over 1,500 officers, clerks, and labourers, the North West Company developed into an efficient organization. The company increased its profits and dividends, often through the ruthless harvesting and near extermination of fur-bearing animals.

In contrast, during this period the Hudson's Bay Company suffered from an inflexible organization and policies which were set in London, England. The many wars between Britain and France in the 1700s also made European markets uncertain. In 1778, the Hudson's Bay Company paid a ten percent dividend, in 1779 eight percent, but from 1783 to 1785 there was no dividend at all. For almost 24 years the dividend averaged four percent. But the company had a stable organization and a history of experience in the fur trade. Yet this was not enough to withstand the pressures exerted by the North West Company and in 1821 a modus vivendi was reached, which resulted in the amalgamation of the two rival companies.