Very soon after the arrival of the railway, in 1901, the Canal was forced to close because of a loss of trade.

Most sections of the Canal were sold back to the successors of the previous landowners, from whom the Canal Company had originally purchased the land. However, the lowest 3.5km/2 mile length at Bude, the “barge canal” length, was acquired by the Local Authority for public use.

The Aqueduct branch was taken over by the local water company and used to carry water supplies from the Lower Tamar Lake reservoir to Bude. The fortunate consequence of this was to keep the line of this branch of the Canal in a single ownership.