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A canal is not a feature of the official Civ games but is in the free game C-evo.
Work-arounds in official gamesEdit
You can build a city on a one-tile-wide isthmus; that functions as a canal. In some of the games, where two cities are allowed to be built immediately adjoining, you can have the same result with two or more cities in a chain.
In a Civ4 expansion pack, fortresses double as ports for ships so when two fortresses are built next to each other on an isthmus 2 tiles wide, that can be used as a canal as well.