As currently Joomla 3 sometimes has issues with canonical URL's, the Canonical plugin has been created by Styleware. Styleware has published some other small plugins that all seem to receive nice reviews, so I decided to take their Canonical plugin for a test. One of the reasons was also an issue I had on one of my own sites, where the canonical URL for the homepage was set incorrectly by the Joomla core system-SEF plugin, which basically prevented the page from being indexed by search engines (UPDATE: solved in 3.2.1). Styleware calls this a killer SEO bug, which might seem a bit over the top, but they've got a point here. Also for blog views where not every article is listed to a menu-item canonical are sometimes created incorrectly.
What the plugin does is basically is no more then putting the functionality in place that Joomla 3 should offer by itself. The plugin claims to provide the following:
"Since version 3, it fixes the homepage canonical, article canonical, category canonical, redirects tag to a single page, removes all Joomla! canonical links (these are broken). It overal fixes all major bugs with Joomla! canonicals."
The plugin has no parameters, so all you need to do is to install and publish it. Tested on a few sites, and it works nicely, so recommended for any Joomla 3 site with canonical issues.