Climate change has resulted in an accelerated decline of Arctic sea ice since 2001 resulting in primary production increases and prolongation of the ice-free season within the Northwest Passage. The taxonomic and functional microbial community composition of the seawater and sea ice of the Canadian Arctic is not very well known. Bacterial communities from the bottom layer of sea ice cores and surface water from 23 locations around Cornwallis Island, NU, Canada, were extensively screened. The bacterial 16S rRNA gene was sequenced for all samples while shotgun metagenomics was performed on selected samples. Bacterial community composition showed large variation throughout the sampling area both for sea ice and seawater. Seawater and sea ice samples harbored significantly distinct microbial communities, both at different taxonomic levels and at the functional level. A key difference between the two sample types was the dominance of algae in sea ice samples, as visualized by the higher relative abundance of algae and photosynthesis-related genes in the metagenomic datasets and the higher chl a concentrations. The relative abundance of various OTUs and functional genes were significantly correlated with multiple environmental parameters, highlighting many potential environmental drivers and ecological strategies.