The rise of free trade following the Sayer trial had called into queston the ability of the Hudson's Bay Company to govern the far-flung territories of Rupert's Land, but the British Colonial Office had long been waffling over the issue of how to end the company's rule and establish colonial status. In 1865, John A. Macdonald agreed that Canada would take responsibility for these negotiations as a part of establishing the terms of Confederation. The state of Minnesota had fielded an offer of $10 million, and Canadian politicians feared the imminent loss of the transcontinental nation they envisaged should they fail to respond to the situation. William McDougall and George-Étienne Cartier negotiated on behalf of the Canadian government and eventually agreed to a price of  £300,000  for the territory, with the HBC retaining five per cent of the land along the North Saskatchewan River and land around the existing trading posts in the northwest. Native and Métis residents of Rupert's Land were not consulted on these measures. As Cree chief Sweetgrass remarked, "We hear our lands were sold and we do not like it; we don't want to sell our lands; it is our property, and no one has the right to sell them."

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