Randy from Tulsa, Oklahoma asks:

Has the Hudson's Bay Company always been financially stable? Was there ever a time that the government subsidized the company to keep it operating?

Bob Bothwell responds:

The company's profits were at the mercy of three main factors, fashion, weather and war. Especially in time of war, the return on investment was often zero and they stayed in business only on a very low level. In the 1690-1713 period the company was almost driven out of its posts by the French, and in 1782 La Perouse demolished its very expensive fort at York Factory.

This suggests what I think was usually the case down to the end of the Napoleonic Wars, that the company subsidized the British government more than it the government subsidized the company. After all, the company administered a very large chunk of the British Empire out of general revenues -- including justice and frequently defense.

Things began to change in the post-1815 period. While overall I would still say that the company on balance cost the British government nothing, governments were expanding and growing more expensive, and interfering -- often for good reason, of course. The company did not have the option of raising a private army and it really did not have the finances. So it made much more sense to face the future and capitalize on the company's assets (a third of North America, after all), which is what the company did under its "new" post-1863 management -- men who were more interested in dollars than in imperial glory. It was the deal struck with the Canadian government (and facilitated by the British government) that turned the company into a recognizably modern business enterprise.