Yes, they could, but it would be a bit more messy. Since buildings are overbuildable, one building can't change the type of the tile in terms of second building, for example. So, a land tile with canal will remain land tile, the same way as river tile with bridge remains river.
It would be a bit inconvenient to not being able to treat canals as navigable rivers in terms of buildings. And I believe it would require some significant adjustments to graphics - normally buildings split the tile they are on in half, but if canal will be on only one half of the tile, it would struggle to connect all possible ends visually.