Horses have done this work for many many years. I don't know if it is cruel or not, the horses are strong animals that have worked with man for centuries, they have to be looked after and fed (in Britain anyway). If they don't do this work the chances are the breeds will die out and the horses themselves will be 3/4 ton of dog food.
Actually I thought snowflakes preferred horses to diesel, in this case I suspect they are complaining about the fact that it's pleasure trips keeping the canal going.