In certain parts of the Canadian Archipelago, small localized areas of water remain ice free throughout the winter, despite the extreme temperature differences between the atmosphere and the ocean surface. One such area, close to Dundas Island, has been studied in detail, both from the point of view of the atamospheric/oceanic heat exchange over the open water and its local geographic and oceanographic context. The paper describes the oceanography of the area and local weather and tidal flow conditions. A significant feature of the oceanographic records is a strong modulation of near-surface ocean temperature at tidal frequencies involving temperature differences as great as 0.2 ¿C within a single tidal cycle. For the most part, the surface waters are 0.1¿ to 0.2 ¿C above freezing. The presence of this relatively warm surface water is thought to be due to upward mixing occasioned by fast tidal flows across the shallow sill connecting Dundas and Devon islands. Historical records of water properties in the Sverdrup Basin lying to the north of the polynya area show temperatures substantially above freezing point at depths of 50 m and below. This readily accessible body of warm water is thought to be the source of the sensible heat required for the existence of the polynya. This is supported by existing current measurements which suggest a mean southerly transport in the channels leading into and out of the region of the polynya site. A tentative application of the atmospheric heat flux measurements to the whole Dundas Island--Bailey Hamilton Island area suggests that sufficient heat may be lost to affect significantly the water column further south in Crozier Strait and Wellington Channel. The limited information available shows the more southerly waters of these passages to be relatively well mixed and cooled relative to the water of the Sverdrup Basin, just to the north of the Dundas polynya area.