The Canada Basin has exhibited a significant trend toward a fresher surface layer and thus a more stratified upper ocean over the past three decades. Here, we explore the extent to which the Community Earth System Model (CESM) accurately simulates the observed surface freshening and seasonal processes that contribute to the freshening. We examine 30 simulations from CESM1 (used in the IPCC AR5), 3 simulations from CESM2 (IPCC AR6), and ocean observations from 1975 and 2006-2012. In contrast to the observations, the models simulate salinity profiles that show relatively little variation between 1975 and 2012. We demonstrate that this bias can be partly attributed to the model’s tendency to mix freshwater too deep, creating a surface layer that is saltier than observed. The results provide insight for climate model improvement that could have wide-reaching implications because upper-ocean stratification influences the vertical transport of heat and nutrients.