By 1868, Riel had returned from Montreal to the Red River area. He became a leader of the Métis in the Red River area. Over the next two years, he took advantage of a gap between the departure of the Hudson's Bay Company and the appointment of a Canadian governor to organize and head a provisional government, which eventually negotiated the Manitoba Act with the Canadian government. The Act established Manitoba—previously part of the Northwest Territories—as a province, and provided some protection for French language rights, an important issue for the largely French-speaking Métis.
Before this, however, the Canadian government appointed a notoriously anti-French governor, William McDougall. Riel's provisional government expelled McDougall (whose term had not officially begun) from the province (October 1869), and took control of Fort Garry (Winnipeg). While in control of the fort, he arrested a Canadian armed force led by Major Boulton and consisting of 48 men, including a previously escaped prisoner, Thomas Scott. Major Boulton was sentenced to death for interfering with the provisional government, but intercessions on his behalf by Donald Smith, a representative of the Canadian government, and others resulted in his pardon.
Thomas Scott, an Orangeman, however, was found guilty of defying the authority of the provisional government, fighting with his guards, and insulting the president—crimes not usually considered capital at the time—and sentenced to death. Donald Smith and Major Boulton were among those who asked Riel to commute the sentence, but Donald Smith reported Riel responding to his pleas by saying, 'I have done three good things since I have commenced; I have spared Boulton's life at your instance, I pardoned Gaddy, and now I shall shoot Scott.' Scott was executed by a firing squad on March 4, 1870. The precise details of Scott's execution are not known, but Boulton's memoires of the North West Rebellions cite John Bruce, a Metis and the first president of Riel's provisional government, as claiming that only two bullets from the firing squad hit Scott; one bullet hit his left shoulder, and the other his upper chest. A man stepped forward and discharged his pistol close to Scott's head, but the bullet penetrated the upper part of the left cheek and came out somewhere near the cartilage of the nose. Still not dead, Scott was placed in a kind of coffin, from which he was later reported to cry, 'For God's sake take me out of here or kill me.'
Canada and Riel's government reached an agreement for the admission of Manitoba to the Canadian confederation. Part of the agreement was that a Canadian military expedition under Colonel Garnet Wolseley would be sent to the Red River to provide a means of exercising Canadian authority. However, anger over Scott's execution was growing rapidly in Ontario, and many Ontarians looked on the purpose of the Wolseley expedition as suppression of rebellion. Riel fled as the expedition approached the Red River. These events came to be known as the Red River Rebellion.
Riel became an American citizen in 1883. The following year, he was teaching at a Jesuit mission in Montana. A delegation from the community of Métis from the south branch of the Saskatchewan River asked him to represent them and present their grievances to the Canadian government. He did so, but received no response. By March of 1885, Métis patience was exhausted and a provisional government was declared.
Riel was the political and spiritual leader of the North-West Rebellion, also known as the North-West Resistance. He was increasingly influenced by his belief that he was divinely chosen as leader of the Métis. On May 15th, Riel surrendered to Canadian forces, and was tried for treason, with a jury consisting entirely of English-speaking Protestants.
During his trial, Riel made two long, eloquent speeches. He rejected his lawyer's attempt to argue that he was not guilty by reason of insanity. The jury found him guilty but recommended mercy; nonetheless, Judge Hugh Richardson sentenced him to death. Fifty years later one of the jurors, Edwin Brooks, said that Riel was tried for treason but hanged for the murder of Thomas Scott.
On November 16, 1885, Louis Riel was hanged for treason. The prime minister, Sir John A. Macdonald, thwarted all attempts to obtain commutation of Riel's sentence to life imprisonment. He is famously quoted as saying "He shall hang though every dog in Quebec bark in his favour." Riel's execution caused lasting upset in Quebec.
Ironically, Riel was inadvertently responsible for the successful fulfilment of John A. Macdonald's National Dream, the building of the Canadian Pacific Railway. At the time when Riel's second rebellion occurred, the railway was deep financial trouble and headed for collapse. After the opening of hostilities, the CPR played a critical role in transporting troops to the area in only 9 days as opposed to the 3 month journey necessary for the Red River Rebellion. This feat garnered sufficient political support to supply sufficient funds to successfully complete the line.
The non-Métis perception of Louis Riel as an insane traitor modified somewhat in the 20th century. Many now view Riel as a hero who stood up for his people in the face of a racist government. In the 1960s, the Quebec terrorist group, the Front de libération du Québec, adopted the Louis Riel name for one of its terrorist cells. A statue of Riel now stands on Parliament Hill. The student centre and campus pub at the University of Saskatchewan are named after Riel. As J. M. S. Careless has observed, it is possible that Riel was both a murderer and a hero. It is also possible that he was a man whose one foolish action drastically altered the history of his people. For example, shortly after the Red River Rebellion the Canadian government began a program which speculators and other non-Métis exploited to dispossess the Métis of their land; had Scott not been executed, the government might well have supervised the program more rigorously, given the good relations between Canada and the Métis until that time.
On October 22, 2002, CBC Newsworld and its French-language equivalent Réseau de l'information staged a condensed one-hour historical re-creation of a retrial of Riel, with Canadian viewers invited to vote guilty or not guilty over the Internet. The poll received 10,000 votes with 87% voting Not Guilty. The results of this straw poll have led to the suggestion that Riel be pardoned by the government. Raoul McKay and other Métis scholars have noted that Riel is a more important figure to non-Métis than to Métis (perhaps because he is the only Métis figure most non-Métis are aware of).