The Canal is basically a ghost story mixed with a whodunit. David's wife is missing and, when he sees a mysterious man on the same night as her disappearance, he begins to suspect the man is responsible. However, his suspicions lead him to believe the man is actually the ghost of a former murderer who once lived in his house.
It's not the most original idea for a film, but it unfolds in such a way as to feel quite different. The visual aspects of this movie are very memorable, as is the performance from its lead, Rupert Evans and, combined with a simple but compelling story, the film as a whole is very effective.
For those of you tired of the dreaded jump-scare-wins plague that infests this genre at the moment (Haunting in Connecticut 2 being a prime example), The Canal is the cream that floats to the surface, as per The Woman In Black or (the good parts of) Sinister. It concentrates on David's deteriorating state of mind and the effect this has on those around him, to drag the viewer into his crumbling world, thus making his visions of the supernatural more believable. Supporting actress Kelly Byrne is also very good, bringing an unusual amount of realism into her role as the babysitter and, more importantly, the relationship she has with David.
Stealing at times from classic scenes in The Ring and The Grudge leaves it open to some likely accusations of it ripping off the Japanese classics but I think that would be a narrow-minded criticism. For the most part, The Canal has a refreshingly quirky feel to it, but in a Kubricky rather than Lynchy style and that is arguably its greatest strength because it's a shiny finish on an already polished script and screenplay.
To say that The Canal is this years "The Conjuring" is true - if you found the Conjuring scary. But The Canal feels wholly different; it sits firmly in the independent camp yet has the potential to be a runaway mainstream hit, due to its efficient use of effects and, quite frankly, ability to instill dread in the viewer.
I tweeted this as being a horror masterpiece after I walked out of the cinema. I don't think I was being too unrealistic.