Canonization does not change an individual's status in the eyes of God—nothing can change that. What it does is make a declaration about what the Church thinks of them:
By canonizing some of the faithful, i.e., by solemnly proclaiming that they practiced heroic virtue and lived in fidelity to God's grace, the Church recognizes the power of the Spirit of holiness within her and sustains the hope of believers by proposing the saints to them as models and intercessors.
(Catechism of the Catholic Church, paragraph 828)
In other words, what canonization does is make it official to all Catholics that the Church recognizes, by the power of the Holy Spirit that acts in her and guides her, that a certain person has lived an undeniably holy and grace-filled life; that they may be used as models for our attempt to live out a Christian life; and that we here on Earth may ask them to intercede for us with God, to ask for God's mercy and intervention on our behalf.
It is not always the case, however, that those Christians who are recognized as saints were formally canonized. The Blessed Virgin Mary, for example, has always been thought holy, but never gone through a canonization process (not that she would have an issue!) But usually, in relatively modern times, there's been some process that the Church has put candidates for such great holiness through, not for the candidate's benefit but for the Church's.