The canary represented Arrival‘s Louise Banks and forshadowed both her ability to communicate with the heptapods and forsee the future—just as canaries were used in coal mines to “predict and communicate” death for humans in mineshafts if the air toxins rose to lethal levels.
The canary was a purely narrative device, and not there to be taken literally. It was explicitly mentioned that no toxins inside the shell had been detected, the atmosphere inside the shell was constantly monitored, and everyone was already well-protected. In practical use, the canary is redundant and probably an extraneous risk in that situation. Most explanations you’ll read about the canary get this wrong as they only refer to the its presence as a practical measure.
Director Denis Villeneuve purposely wanted us to notice the canary, since there were multiple visual shots of its cage and numerous times when its repeated chirping was high in the audio mix. Notice, too, that in Louise’s visions, her and Ian’s daughter had drawn a picture of her parents with a caged canary for the “my parents talk to animals” school assignment.
Secondarily, the canary is used to throw the viewers off a bit as Arrival is a “first contact” film. We expect the canary to die through contact with the aliens, but it doesn’t, signaling the benevolent intent of the heptapods.
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If the canary was purely narrative and there was no chance of the scientists being harmed in the ship why were they wearing hazmat suits? Would those not also be extraneous? The canary is what indicates to Louise when she removes her suit that there is no alien substance that will harm her in the ship. The canary has no extra protection, showing the scientists that there are no unidentifiable/alien substances present, no?
I’ve been considering this for a bit. While I think the canary is there more for the symbolism, doesn’t necessarily exclude it for practical purposes. What if their equipment failed or there was some kind of electrical shortage? They don’t know what he aliens are capable of; they could even damage something by accident. So the canary could be there as a backup or last resort. Makes sense. I do think its primary purpose is an analog to Louise.