Hudson's Bay Company's claim of ownership
When granted the English Royal Charter in 1670 by King Charles II of England, the Hudson’s Bay Company, under the governorship of the king's cousin Prince Rupert of the Rhine, was granted “the sole Trade and Commerce of all those Seas, Streights, Bays, Rivers, Lakes, Creeks, and Sounds, in whatsoever Latitude they shall be, that lie within the entrance of the Streights commonly called Hudson's Streights, together with all the Lands, Countries and Territories, upon the Coasts and Confines of the Seas, Streights, Bays, Lakes, Rivers, Creeks and Sounds, aforesaid, which are not now actually possessed by any of our Subjects, or by the Subjects of any other Christian Prince or State”, “and that the said Land be from henceforth reckoned and reputed as one of our Plantations or Colonies in America, called Rupert's Land.” The Royal Charter made the “Governor and Company …, and their Successors, the true and absolute Lords and Proprietors, of the same Territory, Limits and Places aforesaid, and of all other the Premisses [sic],” and granted them the authority “to erect and build such Castles, Fortifications, Forts, Garrisons, Colonies or Plantations, Towns or Villages, in any Parts or Places within the Limits and Bounds granted before in these Presents, unto the said Governor and Company, as they in their Discretion shall think fit and requisite.” Following merger with the North West Company in 1821, the Hudson’s Bay Company’s monopoly privileges and licence were extended to trade over the whole of British North America by including a region called the North-Western Territory.
The Rupert's Land Act 1868 of the United Kingdom Parliament authorized the sale of Rupert’s Land to Canada with the understanding that “‘Rupert's Land’ shall include the whole of the Lands and Territories held or claimed to be held by the” Hudson’s Bay Company. The prevailing attitude of the time was that Rupert’s Land was owned by the Hudson’s Bay Company because “From the beginning to the end, the [Hudson’s Bay Company] had always claimed up to the parallel 49,” and argued that the Royal Charter and various Acts of Parliament granted them “all the regions under British dominion watered by streams flowing into Hudson Bay.” Rupert’s Land had been essentially a private continental estate cover 3.9 million km2 in the heart of North America that stretched from the Atlantic to the Rocky Mountains, and from the prairies to the Arctic Circle. Even Sir John A. Macdonald saw the land as being sold to Canada: “No explanation has been made of the arrangement by which the country (Rupert’s Land) is handed over to the Queen, and that it is her Majesty who transfers the country to Canada with the same rights to settlers as existed before. All these poor people know is that Canada has bought the Country from the Hudson’s Bay Company, and that they are handed over like a flock of sheep to us.”
However, this did not settle the issue of Aboriginal title over the land. At the time the Royal Charter was granted in 1670, the Crown did not have the authority to give jurisdiction of sovereignty over the territory already settled and inhabited by the Indigenous people of North America. The Royal Charter ignored the First Nations who were already living on the land and exercising sovereignty over it, and the Hudson’s Bay Company had not acquired title to the land from the Aboriginal communities prior to their negotiations with Canada that began in 1856. Due to the Royal Charter and the later Rupert's Land Act 1868, the Crown held the attitude that they already possessed the land, and that the treaties were a peaceful way to allow for settlement of the Northwest Territories in lands the Crown already owned. While the First Nations understood the treaties to be between nations to share the land (ownership of the land was not a concept in First Nation’s cultures), the Crown saw them as a way to ensure sovereignty over the land from a people who only had sovereignty as a "personal and usufructuary right, dependent upon the good will of the Sovereign" in the Royal Proclamation of 1763 ("at the time of the discovery of America, and long after, it was an accepted rule that heathen and infidel nations were perpetual enemies, and that the Christian prince or people first discovering and taking possession of the country became its absolute proprietor, and could deal with the lands as such.") The Calder v British Columbia (AG) case in 1973 was the first case in Canadian law that acknowledged "a declaration that the aboriginal title, otherwise known as the Indian title, of the plaintiffs to their ancient tribal territory hereinbefore described, has never been lawfully extinguished." This ruling has led to more Aboriginal land claim negotiations, and overhauled much of the process of addressing Aboriginal title to land that existed prior to colonization and confederation, and whether that title had been extinguished.