The closer your canister is to your tanks water level, the more waterflow it will produce since there is less water head height for the filter to overcome. Your filter pushes water back up to the tank so it does need to be below the tanks water level. Your canister will state a maximum head height which you must be within for it to work. Its not easy pushing water uphill.
Head height = If you turn the power off, the head height is the distance from the pump itself to the top of the tank (or to the water level if your tank is drilled)