Canonical transformations are defined and discussed along with the coherent and the ultracoherent vectors. It is shown that the single-mode and the n-mode squeezing operators are elements of the group of canonical transformations. An application of canonical transformations is made, in the context of open quantum systems, by studying the effect of squeezing of the bath on the decoherence properties of the system. Two cases are analysed. In the first case, the bath consists of a massless bosonic field with the bath reference states being the squeezed vacuum states and squeezed thermal states while in the second case a system consisting of a harmonic oscillator interacting with a bath of harmonic oscillators is analysed with the bath being initially in a squeezed thermal state. © 2005 IOP Publishing Ltd.