I definitely like the idea of canals and chunnels for that matter. They should only be available in the late industrial to modern age though. I haven't figured out how to include a screenshot yet, but I have been fooled before by settling by what looks like a coast. I go to build the Colossus and find out it's a lake!
Going up one square would have been fine.
It's just that the coast line looks like you can go in. If road can connect the two sides, why not a canal? Now, in some cities, builiding a canal can be done when you biuld a city. Therefore, if we add this canal, or chunnel feature (yes, we indeed) then I propse that it can be done anywhere, by the workers just to make it worthwhile, but if it's built within the radius of a city, it should get culture. As soon as a cultural influence expands to cover the canal, then maybe the canal nowhere near the city could then add culture to the city as well.
Chunnels going across a small lake is lazy, but from on continent to another, it would be sweet. Now your land chokepoints are not just isthmuses (sp?, or isthmusi?) but where the canals are as well......give a sense of border control.
Chunnels and canals, whether in a city radius or not, should provide huge commerce....think of it as a colony, maybe that would be the best approach..a colony which collects commerce and culture. How do that sound?
This would make for some interesting tactics, such as giving away the canal tech in hopes that the AI or other human player builds a canal that would eventually helps your forces move in their or others' territory. I think offering to build a canal on other land and controlling that canal for several turns would be neat, but hard to do, but look at the Panama Canal, as Suez I believe, that's what happened. It would make great points for victory conditions.