Powering a canoe with an outboard engine is perfectly alright. It has been
done for decades in some pretty tough environments. As a boy I remember a
number of Maine guides running fully loaded 17' canoes up local rivers using
an outboard for power.

Right now it seems that the best engine available on the market is the
Mercury 2.5 or 3.5 horsepower. You'd need to buy an extra long shaft model
and fit it with a shallow pitch propeller for power.

Here is a link for Mercury:

http://www.mercurymarine.com/engines...ginesetfour_sp
ecs.php?ID=66

Honda also touts their 2 and 5 hp motors as being suitable for canoes. I
would look at those as well:
http://www.honda-marine.com/modeldet...modelGroup=bf2

There are several 12' - 13' square stern canoes available today. The problem
with a short canoe is that it is typically pretty wide, in the 38" - 42"
range. This could create a space issue on your houseboat. Judging from your
comments, if I were you, I'd consider towing the canoe with a snug fitting
marine cover on it.

Here is a link for some canoes: http://www.directboats.com/sqstca.html

I hope this is of some help to you.

Whit