A 63-year-old woman has been found alive following a canoeing accident south of Tobermory, but her 10-year-old grand-nephew is dead.

The two were located shortly before 10 a.m. Wednesday and brought to Lions Head Hospital by ambulance, the OPP told CTV News.

The woman is in serious but stable condition. An autopsy is to be performed on the boy.

Lions Head is on the east side of the Bruce Peninsula about 50 kilometres south of Tobermory.

The pair failed to return Tuesday from a short canoeing trip on Georgian Bay at Dyer's Bay. They had been wearing lifejackets when they set out around 12:30 p.m.

Emergency services were contacted about 4:30 p.m. that day. The Canadian Coast Guard, the OPP and the Rescue Co-ordination Centre at CFB Trenton all became involved in the search.

A submerged, green canoe was spotted about 5 a.m. by a helicopter crew.  It was located about five kilometres offshore near Cape Chin South.

Searchers spotted the woman and boy near the shoreline and began CPR on the boy. However, he couldn't be revived and was pronounced dead in hospital.

"It didn't look good," Anna Gardiner, a cottager in the area who submitted photos to MyNews, told CTV News on Wednesday. "They were pounding on his chest pretty good."

Gardiner said she could hear a rescue helicopter working overnight.

"I could see a big light" as they searched off the tip of Lion's Head peninsula in the dark, she said.

"Georgian Bay is very unforgiving," Gardiner said. "It's cold. Very, very cold water."