Until the construction of the canal system, most goods were transported by sea or river. Early industrial enterprises, worked by water-power, were built in the country beside rivers. The canal network linked the countryside with the towns, providing vital transport for raw materials and the products of new industries. Canals also transformed the landscape with bridges, aqueducts, tunnels and locks.

90 of the 165 Canal Acts passed by AD 1803 were connected with collieries. It was estimated that canals cost 10,000 guineas a mile; they were paid for by Trusts, usually financed by local shareholders. The first major canals were in the industrialising areas of northern and central England; the Severn and Mersey rivers were joined by 1772 and the Trent and Mersey by 1777. A route across the Pennines linking industrial Lancashire and Yorkshire took longer.

Canal building demanded great engineering skills; the aqueduct carrying the Ellesmere Canal across the River Dee, built by Thomas Telford (1757-1834), is over 1000 feet long and 121 feet high. The canals employed a huge workforce of skilled and unskilled labour, much of it raised locally. However their most important economic effect was to make inland transport cheaper for coal, stone, metals, bricks and grain, and safer for fragile goods like the ceramics of the Staffordshire pottery companies.