I have 2 concerns- it looks like one side is quite convex while the other is seriously concave at the watermark, this could have a real affect on performance because it will affect how the canoe cuts through the water- think of a car that has hit a curb and knocked a wheel out of line.
My other concern is the strength in that area, how thin is the remaining material? if there's a large difference, it will always be a weak spot in a vulnerable area, and it could lead to uneven flex, creating even more stress on it. Even tying it down could pose problems because if you do the usual and tie from the deck or grab handle you could actually twist it out of line, and it could assume that twist permanently over time.
If appearance isn't critical, I'd glass over it until faired with the opposite side, but if appearance is critical then I'd cut it out and splice in new wood. That's a big job requiring you to cut the strips at different points to stagger the joints, and trim and scarf in new pieces while trying to match the grain and color as close as possible, for that a flush cutting trim saw is your friend.