My current game could use canals, before I could get a good handle on the land around me I settled 2 cities and found out they were both on the shore of a huge lake, not the actual ocean
I think canals would allow Carriers and similar heavy naval units into the middle of an unsettled Pangaea.
A Battleship with a range and indirect fire promotion in the above scenario would be unreal and possibly unbalanced versus artillery, missiles, nukes, planes (set up/rebase), and maybe even rockets.
It would still be OP'd if canals were limited to a few tiles across between bodies of water.
However, if canals somehow restricted naval ranged or deployable combat capabilities, then...