Hibler's model, driven by observed weather data, is used to simulate the sea‐ice distribution on the Labrador Shelf for eleven ice seasons. Each simulation runs for 180 days beginning on December 1. Heat supplied to the surface mixed layer by convection into the lower layers has been parametrized as an additional heat flux of 35 W m−2 given to the surface mixed layer until the end of February, and then it is set to zero in March‐May. This step‐function heat flux is determined by matching the ice‐covered area in the model with the observed ice‐covered area in a particular season. Interannual variabilities in the ice‐covered area south of 55°N are well duplicated in the model and, because all oceanic parameters are common in each season, are accounted for by variabilities in the atmospheric conditions. More ice appears in the years when larger amounts of heat were taken by the atmosphere because of lower air temperatures and stronger winds. A secondary contributor to heavier ice years is the larger alongshore wind stress associated with a stronger northwesterly wind. In the ice‐formation period (approximately the first 90 days), the ice volume south of 55°N is nearly equal to the ice transport through 55°N due to a prevailing northwesterly wind and a southeastward ocean current, suggesting that ice forms north of 55°N and is advected to the south, while cold air is also responsible for the appearance of ice by dropping the water temperature which reduces the melting of ice south of 55°N. A difference between the additional heat flux (35 W m−2) and the observed heat loss (about 100 W m−2) in the water column below the 30‐m surface layer may be attributed to the southward advection of cold water.