To be precise, Canonical URL is that URL that you actually want to show to your website visitors. As for example, you might have the following types of URLs:
http://www.yourwebsite.com,
and http://yourwebsite.com
If, your website opens with or without using www, Google will consider them as two different URLs having the same content, and might penalize you for content duplicity. Therefore, you must ensure that you choose the best option (with www) and write the codes in such a way that your website does not gets redirected to the other URL, which is without www.