Canals were built entirely by hand, with horses available for haulage.

Steam powered equipment really didn't become available for construction projects until the late 19C. ( other than steam powered construction railways. Arguably the construction of the Liverpool and Manchester Railway from 1827 would be the first example.)

In the UK the construction of the Great Central Railway in the 1890s is often referenced as the first large scale use of 'steam navvies' in major projects. There are a couple of classic railway histories that cover this, one by G Dow and a more construction oriented one by LTC Rolt if you want to find out more.

The name steam navvies is a throwback to those who dug the canals. Canals were navigations, so those who dug them were navigators, and so popularly known as navvies.