The Venetian solution!

The critical problem is controlling water levels. These naturally fluctuate daily/seasonally/yearly. I would guess this will only get worse.

On a pedestrian level, canals have the same issues as roads in forcing chokepoints, it might even be worse.

Colder climates need to worry about de-icing or freezing protocols.

On an emotional level, I miss my kayak and skating commutes from when I could take a canal.