Once they are cut, I will ease the top and bottom edge with sandpaper before they are installed and also will "paint" on a coat of epoxy as well to prevent water damage. The short sides of the scuppers are end grain, and as such, will be prone to absorbing water much more readily than the long grain, so I feel the epoxy affords more protection and longevity to the inwales.
I have been asked by some folks about the scuppers; what are they for. I will attempt to answer that here. There are some schools of thought that say that scuppers are there to allow water to drain when the hull is overturned. Others say they are for tying gear down in the canoe. Another reason to cut scuppers is to lessen the overall weight of the craft (the gunnels are about 40% of the total weight of the finished canoe). While I don't dispute the facts that the above reasons are the result of the scuppers, I have another theory. The first wooden canoes were either bark canoes, or later, cedar and canvas canoes. Those were built with ribs running the length of the hull and the gunnels were attached over top of them, making the scuppers as a matter of the construction methods. I believe that the scuppers are merely a matter of tradition that has a functional aspect. Beyond that, I believe they look more nautical and really add a lot to the overall look of the canoe.
I don't claim my answer to be the most correct. I have done no real research on the subject. I just look at things and determine what I believe to be true based on my limited knowledge of canoes and their history. I'm sure that someone who has done the work for maritime museums would have much more information than I could provide here.
At any rate, here are the pics from the last few days of work.