Owing to the potential negative impacts of climatic changes and the grand Ethiopian renaissance dam, water scarcity has become an urgent issue. Therefore, the Egyptian Ministry of Water Resources and Irrigation has started a national project of the lining and rehabilitation of canals, to reduce seepage losses and for efficient water resource management. This study presents a new approach for assessing three different lining and crack techniques for the Ismailia canal, the largest end of the river Nile, Egypt. A 2-D steady state seep/w numerical model was developed for the Ismailia canal section, in the stretch at 28.00–49.00 km. The amount of seepage was significantly dependent on the hydraulic characteristics of the liner material. The extraction from aquifers via wells also had a considerable impact on the seepage rate from the unlined canals; however, a lesser effect was present in the case of lined canals. The concrete liner revealed the highest efficiency, followed by the geomembrane liner, and then the bentonite liner; with almost 99%, 96%, and 54%, respectively, without extraction, and decreasing by 4% for bentonite and geomembrane liners during extraction; however, the concrete lining efficiency did not change considerably. Nevertheless, the efficiency dramatically decreased to 25%, regardless of the lining technique, in the case of deterioration of the liner material. The double effect of both deterioration of the liner material and extraction from the aquifer showed a 16% efficiency, irrespective of the utilized lining technique.