Sustainable management of canal water through optimum water allocation is the need of the modern world due to the rapid rise in water demand and climatic variations. The present research was conducted at the Chaj Doab, Indus Basin Irrigation System (IBIS) of Pakistan, using the WEAP (Water Evaluation and Planning) model. Six different scenarios were developed, and the results showed that the current available surface water is not sufficient to meet crop water demands. The Lower Jhelum Canal (LJC) command area is more sensitive to water scarcity than the Upper Jhelum Canal (UJC). The future (up to 2070) climate change scenarios for RCP 4.5 and 8.5 showed a decrease in catchment reliability up to 26.80 and 26.28% for UJC as well as 27.56 and 27.31% for LJC catchment, respectively. We concluded that scenario 3 (irrigation efficiency improvement through implementation of a high efficiency irrigation system, canal lining, reduction and replacement of high delta crops with low delta crops) was sufficient to reduce the canal water deficit in order to optimize canal water allocation. Improvement in the irrigation system and cropping area should be optimized for efficient canal water management.