Using the canvas size dialogue is very useful if you have exact dimensions you are working to, but creative image composition often does not lend itself well to such precise measurements.
You want more canvas to extend a composition, but you dont want to end up with too much canvas and subsequently a much large file to handle. Also, you may have a good idea of how much extra canvas you need visually, but have to visit and revisit the canvas size dialogue to get this right - inevitably having to wait the extra time for this operation to complete.
Well, there is another way! Believe it or not the Crop tool comes in to play here - and no, thats not a mistake! Switch to full screen mode (so your desktop is not visible - shortcut is F) and extend your cropped area outside the canvas of your image to the desired new canvas size by dragging the handles out. Now when you apply the crop it does the exact oposite to what this tool normally does - it actually extends the canvas to where you dragged out the handles to…nice!