I had always assumed because Sal Montagna was the Bonannos acting boss, that according to LCN protocol he outranked Nick Sr, who was a capo (the capo since Vito said no to Sal Vitale). So Sal was essentially telling Nick (not asking) to step down so someone else would be installed as the capo of the Rizzuto faction... or Sal would run it himself. Because Nick said no he had to be hit... he was in violation of protocol in that he went against a direct order from a superior.

And my thinking was that Nick Sr told Sal no because Nick and Vito were considering themselves 100% independent from New York. They thought were too powerful to put up with all of the bs and rats in NY.

But the Rizzutos underestimated how important it is to have the Bonanno flag behind them... and that the Bonannos wanted to get Montreal back in line. And the Bonannos were also making inroads with the Ndrangheta in Ontario. He also underestimated the Reynald Dejardins faction who wanted more control. Throw in the Violis in Hamilton insreasing their power, you have multiple different groups aligned against the Rizzutos.

Sal was going to run everything in Montreal with Reynald, but possibly Sal’s ego was too big and he wasnt diplomatic enough to pull it off and keep all of the factions in-line like Vito did. So Sal and Reynald had a falling out and Sal failed to have Reynald killed, then got killed in return.

Or, and this is a recent theory I just heard - Sal never tried to have Reynald killed... it was actually the Rizzutos who tried to hit Reynald, he just misread the attempted hit. He mistakenly thought Sal did was behind the hit and had him killed. So, the Rizzuto faction successfully splintered the rebel faction.