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The Panama Canal in Action. Boats transiting and construction to the Canal are a daily occurance. The Panama canal extends from the city of Colon on the Caribbean side to Panama City on the Pacific. Ships use to be built to fit within the dimensions of its locks but nowadays they are too large. In an upcoming referendum Panamanians will have to vote on plans to enlarge the canal. Many Panamanians fear that the country will amass huge debts in order to bring the canal into the twenty-first century. Here some workers from the Miraflores Locks, located less than a hour away from Panama City..