Canonical tags are used when you have more than one page on your site which display similar content.
Say for example if you have a directory on your site where users can sort listings, and the results load on the same page using javascript/ajax, but the only thing that is different in the pages are the listings that display. if you use a canonical tag, it would indicate to google that the page which the canonical tag is pointing to is the one that should get indexed and ranked, and it helps you avoid duplicate content.
Here’s some more info: About rel=”canonical” – Webmaster Tools Help
Great to use to avoid duplicate content