Is Canola Oil considered kitniyot, and therefore off limits to ashkenazi Jews during Pesach? Some say yes, and some say no.

There is a debate about oil made from kitniyot products. Some say derivatives of kitniyot are not included in the rabbinic ban on kitniyot, while others say it is.

In Israel, most oils that are not considered kitniyot are lousy. Olive oil is the exception to that rule.

In general, canola oil has been labeled in Israel as being kitniyot. The factories that don't label it as kitniyot still label it as "kosher lpesach, containing liftit (rapeseed)".

The Rabbanut is now changing that. They have now paskened that Canola Oil is not considered kitniyot.
source: Srugim

In the USA it is a matter of debate, with many kashrut agencies considering it kitniyot, while others do not.

From Kashrut.com:

Canola oil was first approved for food use in the United States in 1985 and there are those who therefore suggested that it is a “new” item which shouldn’t be included in the minhag, as per Iggeros Moshe cited above. However, the fault with this line of reasoning is that “Canola oil” is actually “Rapeseed oil” (a.k.a. colza oil) which has been used for centuries in Europe. [“Canola oil” is rapeseed oil specially bred to have less erucic acid (a suspected cause of heart disease) and therefore only this better variation of rapeseed oil is approved for food use in the USA]. In fact, Avnei Nezer (373 & 533) and Maharsham (I:183) specifically mention rapeseed and its oil in their discussions of kitnios. It is also noteworthy that canola often grows near oats, and therefore even those who might argue that canola isn’t kitnios would agree that all of the oats must be removed before the oil is extracted from the canola.

Rav Yaakov Ariel has said the Rapeseed is not considered kitniyot, and therefore Canola Oil isn't either. The Rabbanut said that while they hold Canola Oil is not kitniyot, factories continue to ignore their directive and write on the labels that it is.

An example they gave of how the factories make their own decisions is a package of almonds that was being labeled as kitniyot. When they asked the factory why, the response was because before packaging the almonds, they package peanuts, so they chose to label the almonds as kitniyot as well, just in case. The Rabbanut told them to package the almonds before the peanuts, and that would solve the problem.

As an aside, the factiories should not be able to label products regarding their kashrut in opposition to the decision of the kashrut agency supplying the kashrut certification.If the Rabbanut tells them to label a product a certain way regarding kashrut, they should not be able to "not listen" and label it how they want. I see this as a problem within the Rabbanut system.

Back to canola - will the Rabbanut's psak change people's opinion about Canola Oil? Probably not. Most people are pretty obstinate about their food customs for Pesach. Some people are more liberal and anyway have been accepting canola oil and other things as non-kitniyot in recent years, but most people prefer to be strict, and will continue to be so, especially if the labels continue being marked as kitniyot - how many products have just the hechsher of the Rabbanut that will relabel canola oil as non-kitniyot?