What was the significance of the Erie Canal?

The major significance of the Erie Canal was that it
connected the Great Lakes to the Atlantic Ocean at New York City.  This gave the United
States a major new water route for trade.

Before the
opening of the Erie Canal, farmers and others in what was called the Northwest
(Illinois, Ohio, etc) had no easy access to the markets of the East Coast.  They had to
send their goods down the Mississippi River to New Orleans and then up the Atlantic
coast.  This was, obviously, very time consuming and
inconvenient.

When the canal was completed, the Northwest
was connected to the East Coast.  This greatly expanded the market for goods from the
Northwest and made that region much more attractive for
settlers.