Canals are a way to bridge the gap between two seas. In Victoria 2 they can be built by a great power by enacting a decision. A canal makes it possible to sail through the province with ships and the nation which builds it annexes the relevant province. All ships can sail through the canal and it is not possible to prevent others from using it by other means than a blockade during war.
All decisions to build a canal generate a news bulletin.
Panama Canal
The Panama Canal is a canal that can be constructed between the Atlantic and Pacific oceans through the Panama province. Panama is initially owned by 
Colombia.
Potential:
- This canal has not been built already
- Is a Great Power
- Has researched Mechanical Production
Allow:
- Owns province Panama, or has Panama's owner in sphere of influence
- Has invented Machine Tools (Interchangeable Parts), Nitroglycerin (Inorganic Chemistry) and Prophylaxis against Malaria (Medicine)
- Has researched Iron Steamers
Effect:
- Annex province Panama
- Build the canal
- Gain 10 Prestige
The AI will always take this decision, unless at war.
Suez Canal
The Suez Canal is a canal that can be constructed between the Mediterranean Sea and the Indian Ocean through the province of Suez. Suez is initially owned by 
Egypt.
Potential:
- This canal has not been built already
- Is a Great Power
- Has researched Mechanical Production
Allow:
- Owns province Suez, or has the owner of Suez in sphere of influence
- Has invented Machine Tools (Interchangeable Parts) and Nitroglycerin (Inorganic Chemistry)
- Has researched Iron Steamers
Effect:
- Annex province Suez
- Build the canal
- Gain 10 Prestige
The AI will always take this decision, unless at war.
Kiel Canal
The Kiel Canal is a canal that can be constructed between the Baltic Sea and the North Sea. Kiel is initially owned by 
Holstein. Unlike the other canals, building the Kiel Canal requires the province to be owned directly.
Potential:
- This canal has not been built already
- Owns province Kiel
- Is a Great Power
- Has researched Mechanical Production
Allow:
- Has invented Machine Tools (Interchangeable Parts) and Nitroglycerin (Inorganic Chemistry)
- Has researched Iron Steamers
Effect:
- Build the canal
- Gain 5 Prestige
The AI will always take this decision, unless at war.