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lizardo

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You would need to associate a size with a ship model. It will be a real pisser when you can't get your super dreadnought to fit through the hole and have to send the fleet around the horn. :)

Your canal or navigable river would also have a size limit.

You would have the possibility then of inland ports.

It would be necessary also to limit canals to flat land. No one is going to build canals through the Rocky Mountains.

Probably the best thing to do mark the specific locations where a canal is possible and it's costs. In the case of the Panama Canal a minimum tech level is necessary.

Investment shouldn't be lost if disrupted.

Also, people build canals for a reason. Commerce. Ships pay to use them. Too often the building of the Panama Canal has been compared to the Moon Landing. The Moon Landing was a political stunt.

The Canal was, and is, a money machine. The controlling nation should suck in money from every user. It should seriously lower the costs of sea transport.

This comes back to the idea that there are ongoing costs and manpower requirements with transport particular to each mode. This is what makes it understandable why a canal is necessary beyond being able to move military ships.
 

Capt. Kiwi

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Personally I'm expecting canals to be a decision, rather than a provincial building type set up. This would allow great powers to build one of the major canals, say Panama, without having to have conquered the province. It would also prevent spamming from the AI. I'd expect conditions such as is a GP, relations with country greater than x, some sort of maritime and industrial strength etc. It might even trigger an event with the province owner to see if they agree. If you succeed you get prestige, and the province owner has a source of income, or something similar.