However, by the early 1840s, his relationship with the HBC began to weaken. The HBC, in order to curb the growing amount of free trade or illegal trade, denied McDermot a freighting contract with the HBC and by 1845, his goods from England were not being allowed passage on HBC ships. Furious with Governor Christie over these sanctions, he resigned from the Council of Assiniboia. He did rejoin the Council after an agreement was reached and partial reimbursement for his losses was paid.