If it was me, I would leave a 50 yard or more strip of woods along the canal. This could be a good ambush spot as the deer travel along the canal. The rest maybe clear a section and plant food plots and let some of it grow up with blackberries and brush or young pines and create a bedding area where the deer feel safe. The thicker the better.

I would also check with the local DNR or Conservation Dept., they might come out and make some suggestions. And for some habitat improvements you can get financial assistance from the government.