Refers to a man-made waterway, often narrower than a river, used for transportation, irrigation, or drainage. Common in place names.
This canal was built in the Edo period.
I like walking along the canal.
堀 refers to a moat or ditch (often around a castle), whereas 堀江 specifically denotes a canal used for water transport or drainage.
Standard kanji spelling; this is the only kanji form.
Compound of 堀 (hori, 'ditch, moat') and 江 (e, 'inlet, bay'). The reading ほりえ is a straightforward combination of the kun'yomi of both characters.