The idea, floated in 2016 as a potential fix to the long-running sediment and water quality issues, had been raised again by Tasmanian Greens senator Peter Whish-Wilson in the wake of two new reports which led to a Launceston council halt on silt raking.

But a department spokesperson said investment to improve the estuary's health was being provided under the Launceston City Deal, guided by the associated Tamar Estuary Management Taskforce's river health plan.

"The plan did not identify the Tamar canal proposal as a priority," the spokesperson said.

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Mr Whish-Wilson had flagged the proposal as an important infrastructure project which could also beatify the estuary's western bank. He planned to raise the idea of a case for further studies with the Launceston Chamber of Commerce and relevant federal departments.

However the chamber's executive officer Neil Grose said, based on conclusions in the sediment report, the plan would have "little or no" positive effect on silt levels - which have been causing issues for boat navigation.

He said good governance also demanded a "sound business case" be developed before the return of any dredging program to ensure the costs, responsibilities and desired outcomes were known.

"There are two challenges now - to bring the management of the estuary and the different entities together under one governance structure with some legislative teeth, and to adapt to a shallow-estuary future and the challenges and opportunities that will bring," he added.

NRM North chief executive Rosanna Coombes said last week the mudflats were a sign of river health, suggesting the best way forward was to help the community appreciate that.

A former chair of the Launceston Flood Authority has suggested that under more favourable conditions raking could in fact be an effective solution to the estuary's problems.

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