The most recent Canvas update rolled out a new feature inside of Assignments that allows for an Annotation assignment. Instructors can upload a document to Canvas that students can then annotate using the same annotation functions instructors see inside of the Speedgrader. This includes highlighting, commenting, creating text boxes, drawing, etc.
Currently, the new Assignment type does not support group assignments. If you are looking for a social annotation tool where students can work together to annotate a document, check out Hypothes.is, a social annotation tool currently integrated into Canvas.