My understanding is that, as long as you have a variety of perches, too small can be a problem, but not too big.
Here are my two on their favorite rope perch (1.5" diameter), with their vet-wrapped paper-towel core, which is one of their favorite swings, in the foreground. They're Bourkes, so somewhat bigger than canaries, but as you can see, they're fine with a larger diameter perch. The smallest I would use for mine is about a 1/2" (which is, I think, the diameter of the ropewalk off to the sides, which they do also use regularly) but, being candid, sometimes they choose to perch on things that are narrower, but usually not for very long.