The Otaru City Museum is housed in one of the former warehouses along the canal. A lot of it is kind of standard small-city-museum stuff, but it does have some excellent material on the Ainu, the people who occupied this island before the ethnic Japanese came in. Hokkaido still has an Ainu population (although it’s thought that none are pure Ainu), and they're fighting for recognition. The museum also has a second building, a bit of a walk away, that’s a dream come true for train nuts. You'll find lots of engines and cars from the days when the only railway line in Hokkaido ran from Otaru to Sapporo.