You should build a canal before you develop technology that will reveal a strategic resource.If you connect a city with canals with a railroad, a merchant will be more eager to select such route (merchants are always trying to select the fastest connection). Take advantage of building railroads to make a better route of trade roads.You should create special canals in such a way that they increase trading income. Each canal field on the route of a merchant will provide additional gold.For example, if the continent becomes narrower on a length of three fields, then after building a city on the middle field you can create canals on two sides of the city and make it possible to swim between two waters.
