Index: src/industry_cmd.cpp
===================================================================
--- src/industry_cmd.cpp	(revision 27177)
+++ src/industry_cmd.cpp	(working copy)
@@ -1756,8 +1756,13 @@
 
 			WaterClass wc = (IsWaterTile(cur_tile) ? GetWaterClass(cur_tile) : WATER_CLASS_INVALID);
 
+			/* While it's true Industry Tiles don't have any owner, the following
+			DoCommand below is inadvertently setting bit 4 of m1 to 1. To preserve its
+			original value, store it first before executing DoCommand, then restore it
+			before MakeIndustry takes action. */
+			Owner old_owner = GetTileOwner(cur_tile); 
 			DoCommand(cur_tile, 0, 0, DC_EXEC | DC_NO_TEST_TOWN_RATING | DC_NO_MODIFY_TOWN_RATING, CMD_LANDSCAPE_CLEAR);
-
+			SetTileOwner(cur_tile, old_owner);
 			MakeIndustry(cur_tile, i->index, it->gfx, Random(), wc);
 
 			if (_generating_world) {
Index: src/industry_map.h
===================================================================
--- src/industry_map.h	(revision 27177)
+++ src/industry_map.h	(working copy)
@@ -280,7 +280,7 @@
 static inline void MakeIndustry(TileIndex t, IndustryID index, IndustryGfx gfx, uint8 random, WaterClass wc)
 {
 	SetTileType(t, MP_INDUSTRY);
-	_m[t].m1 = 0;
+	_m[t].m1 &= 1<<4; // Make sure bit 4 is unaffected.
 	_m[t].m2 = index;
 	SetIndustryRandomBits(t, random); // m3
 	_m[t].m4 = 0;
Index: src/saveload/afterload.cpp
===================================================================
--- src/saveload/afterload.cpp	(revision 27177)
+++ src/saveload/afterload.cpp	(working copy)
@@ -2985,6 +2985,30 @@
 	ResetSignalHandlers();
 
 	AfterLoadLinkGraphs();
+
+	/* Convert m1 bit 4 value for all industry tiles */
+	if (IsSavegameVersionBefore(195)) {
+		for (TileIndex t = 0; t < map_size; t++) {
+			/* It's not possible to know who was the original owner of a canal tile built under
+			an Oil Rig tile from an old save game. To preserve savegame backward compatibility,
+			don't do anything about them. Old and new values for a given industry tile can co-exist. */
+			if (IsTileType(t, MP_INDUSTRY) && (GetWaterClass(t) != WATER_CLASS_CANAL)) {
+				SB(_m[t].m1, 4, 1, 1);
+			}
+		}
+	}
+	if (IsSavegameVersionBefore(195)) {
+		for (TileIndex t = 0; t < map_size; t++) {
+			if ((IsTileType(t, MP_STATION) || IsTileType(t, MP_WATER) || IsTileType(t, MP_OBJECT)) && GetWaterClass(t) == WATER_CLASS_CANAL) {
+				assert(IsValidTile(t));
+				assert(!IsTileType(t, MP_HOUSE));
+				assert(!IsTileType(t, MP_INDUSTRY));
+				Owner old = (Owner)GB(_m[t].m1, 0, 5);
+				if (old == OWNER_NONE) SB(_m[t].m1, 0, 4, OWNER_TOWN);
+				if (old == OWNER_WATER) SB(_m[t].m1, 0, 4, OWNER_TOWN);
+			}
+		}
+	}
 	return true;
 }
 
Index: src/saveload/saveload.cpp
===================================================================
--- src/saveload/saveload.cpp	(revision 27177)
+++ src/saveload/saveload.cpp	(working copy)
@@ -262,8 +262,9 @@
  *  192   26700
  *  193   26802
  *  194   26881
+ *  195   CanalOwner testings
  */
-extern const uint16 SAVEGAME_VERSION = 194; ///< Current savegame version of OpenTTD.
+extern const uint16 SAVEGAME_VERSION = 195; ///< Current savegame version of OpenTTD.
 
 SavegameType _savegame_type; ///< type of savegame we are loading
 
Index: src/tile_map.h
===================================================================
--- src/tile_map.h	(revision 27177)
+++ src/tile_map.h	(working copy)
@@ -168,14 +168,27 @@
  * @pre IsValidTile(tile)
  * @pre The type of the tile must not be MP_HOUSE and MP_INDUSTRY
  */
-static inline Owner GetTileOwner(TileIndex tile)
+
+static inline Owner GetTileOwnerOld(TileIndex tile)
 {
 	assert(IsValidTile(tile));
 	assert(!IsTileType(tile, MP_HOUSE));
 	assert(!IsTileType(tile, MP_INDUSTRY));
-
 	return (Owner)GB(_m[tile].m1, 0, 5);
 }
+static inline Owner GetTileOwner(TileIndex tile)
+{
+	assert(IsValidTile(tile));
+	assert(!IsTileType(tile, MP_HOUSE));
+	assert(!IsTileType(tile, MP_INDUSTRY));
+	if ((IsTileType(tile, MP_STATION) || IsTileType(tile, MP_WATER) || IsTileType(tile, MP_OBJECT))) {
+		Owner co = (Owner)GB(_m[tile].m1, 0, 4);
+		return co == OWNER_TOWN ? OWNER_NONE : co;
+		
+	} else {
+		return (Owner)GB(_m[tile].m1, 0, 5);
+	}
+}
 
 /**
  * Sets the owner of a tile
@@ -193,8 +206,11 @@
 	assert(IsValidTile(tile));
 	assert(!IsTileType(tile, MP_HOUSE));
 	assert(!IsTileType(tile, MP_INDUSTRY));
-
-	SB(_m[tile].m1, 0, 5, owner);
+	if ((IsTileType(tile, MP_STATION) || IsTileType(tile, MP_WATER) || IsTileType(tile, MP_OBJECT)) && owner == OWNER_NONE) {
+		SB(_m[tile].m1, 0, 4, OWNER_TOWN);
+	} else {
+		SB(_m[tile].m1, 0, 5, owner);
+	}
 }
 
 /**
Index: src/water_cmd.cpp
===================================================================
--- src/water_cmd.cpp	(revision 27177)
+++ src/water_cmd.cpp	(working copy)
@@ -419,7 +419,9 @@
 		if (IsTileType(tile, MP_WATER) && (!IsTileOwner(tile, OWNER_WATER) || wc == WATER_CLASS_SEA)) continue;
 
 		bool water = IsWaterTile(tile);
+
 		ret = DoCommand(tile, 0, 0, flags | DC_FORCE_CLEAR_TILE, CMD_LANDSCAPE_CLEAR);
+
 		if (ret.Failed()) return ret;
 
 		if (!water) cost.AddCost(ret);
Index: src/water_map.h
===================================================================
--- src/water_map.h	(revision 27177)
+++ src/water_map.h	(working copy)
@@ -176,6 +176,12 @@
 	return IsWater(t) && GetWaterClass(t) == WATER_CLASS_RIVER;
 }
 
+static inline bool IsCanalOnRiver(TileIndex t)
+{
+	assert(HasTileWaterClass(t));
+	return HasBit(_m[t].m1, 4); 
+}
+
 /**
  * Is it a water tile with plain water?
  * @param t Tile to query.
@@ -346,8 +352,33 @@
 	return HasTileWaterClass(t) && IsTileOnWater(t) && !IsCoastTile(t);
 }
 
+/**
+ * Comment about getting owner of canal
+ */
+static inline Owner GetCanalOwner(TileIndex t)
+{
+	assert(HasTileWaterGround(t));
 
+	if (GetWaterClass(t) != WATER_CLASS_CANAL) {
+		return GetTileOwner(t);
+		} else { 
+		Owner co = (Owner)(GB(_me[t].m6, 0, 2) && GB(_me[t].m6, 6, 2));
+		/* Canals don't have OWNER_TOWN, and remapping OWNER_NONE
+		* to OWNER_TOWN makes it use one bit less */
+		return co == OWNER_TOWN ? OWNER_NONE : co;
+	}
+}
 /**
+ * Comment about setting owner of canal
+ */
+static inline void SetCanalOwner(TileIndex t, Owner co)
+{
+	if (co == OWNER_NONE) co = OWNER_TOWN;
+	SB(_me[t].m6, 0, 2, GB(co, 0, 2));
+	SB(_me[t].m6, 6, 2, GB(co, 2, 2));
+}
+
+/**
  * Helper function to make a coast tile.
  * @param t The tile to change into water
  */
@@ -413,6 +444,7 @@
 {
 	assert(o != OWNER_WATER);
 	MakeWater(t, o, WATER_CLASS_CANAL, random_bits);
+	SetCanalOwner(t, o);
 }
 
 /**