Pour the water into a medium bowl or large liquid measuring cup and sprinkle the yeast over the top. Let stand for about 5 minutes, until foamy.
Add the eggs, milk, melted butter, and sugar, and whisk to combine.
In a large bowl, whisk together the flour and salt.
Pour the wet ingredients into the dry ingredients, stirring with a flexible spatula to form a shaggy dough. Turn the dough out onto a clean surface and use your hands to knead until it comes together in a smooth ball, about 2 minutes.
Grease a clean large bowl with canola oil. Transfer the dough to the greased bowl and cover tightly with plastic wrap. Let the dough rise in a warm place until doubled in size, about 1 hour.
Punch the dough down with your fist, then turn it out onto a lightly floured surface.
Roll the dough into a large rectangle, about ¼ inch (6 mm) thick. With a sharp knife, cut the dough into 2-inch (5 cm) squares, then transfer the squares to a baking sheet lined with parchment paper.
Heat the canola oil in a large pot over medium-high heat until it reaches 350˚F (180˚C).
Lower the dough squares, 3-4 at a time, into the hot oil. As soon as the beignets puff up, use tongs or a kitchen spider to gently flip them over. Fry until golden brown on both sides, flipping as needed, 2-3 minutes more. Transfer the beignets to a wire rack to drain.
Dust the beignets with powdered sugar and serve warm.
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