The Thomson Canal is part of the giant Thomson Water Project located between River Miles 24 and 30. The canal was built to move water from Thomson Reservoir near the top of the bluffs down to the Thomson Power Plant which is near the bottom of the bluffs. Having the reservoir dam and the hydro power plant located in two different locations is an unusual configuration. The advantage is that much more hydro power can be generated due to the water not losing energy as it cascades down toward the bottom of the bluffs. The disadvantage is that the spectacular rapids and waterfalls on the river channel see only a fraction of their historic water volume.

The canal starts at the southeast corner of the Thomson Reservoir. There is a head house that blocks the reservoir and contains the valves and controls that regulate the amount of water flowing into the canal. The canal is 2 miles long overall. The first 1,500 feet of the canal between the head house and the Thomson Road Bridge were blasted out of rock. The next 2000 feet from the road bridge to just past the Munger Trail Bridge was excavated. The next 3,500 feet followed an old stream bed, while the final 3,500 feet used the existing Forbay Lake. The canal ends at an intake building. Here, water from the canal flows through another set of valves and into three large pipes. The pipes run down the steepest part of the bluff, ending at the bottom in a pair of large surge tanks. Water flows from the surge tanks through the power plant and exits back into the St. Louis River.

The Thomson Dam pool is at 1,069 feet above sea level. Lake Superior is at 602 feet above sea level. This leaves a potential drop of 467 feet for generating hydro power. The canal leaves the reservoir at 1,051 feet and enters the intake at 1,050 feet. The river level is at 680 feet. This means that the actual hydro power realized is from a drop of 370 feet. The Fond du Lac dam just downstream picks up another 78 feet of the drop, which means that 448 feet of the 467 feet of hydro potential is used. There are also three more dams upstream of the Thomson Water Project that captures another 79 feet of hydro potential.

The Thomson Canal runs 2 miles, and the water pipes are another mile, for a total distance of 3 miles. This St. Louis River channel takes 5 miles to cover this same distance.