Collaborations are documents that the entire class can work on collectively at the same time.
In Canvas, collaborations are built using the most well-known web-based tools: Google Docs and Ether Pad.
Students can collectively work on, for example, a Google document. This document could be a group paper, note-taking document or a brainstorming session. This gives you (students) and your instructor an easy way to keep track of the collaboration without having to email the update to all the parties involved.
The person creating the collaboration will be the only person who needs to have a Google account. Your instructor is the one who usually creates the collaboration and then will expect students to contribute to the content of the collaboration document.

If your instructor creates a collaboration, it will be visible as a link in "Collaborations." Simply click the link and start typing content.

If you would like to create a collaboration (a Google doc) to collaborate with your project group, you can do so by following the steps below.

Once you are in your course, from the left navigation, click on "Collaborations"
Click on "Start a New Collaboration"
Select "Google Docs" from the drop down
Give it a title and description
From the class list, select the ones with whom you want to collaborate. Then Click on "Start Collaboration"
The collaboration that you just created will show as a link. Collaborators can simply click on the link to participate.