Canadian water hounds worried by horse (6,3)

I believe the answer is:

hudson bay

'canadian water' is the definition.

'hounds worried by horse' is the wordplay.
'worried' indicates an anagram.
'by' means one lot of letters go next to another.
'horse' becomes 'bay' (bay is a kind of horse).
'hounds' anagrammed gives 'hudson'.
'hudson'+'bay'='HUDSON BAY'

I've seen this clue in The Guardian.

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