Mix the sugar and cinnamon in a large plate, then set aside. Heat the water and the butter in the saucepan until it comes to the boil. Stir in the vanilla extract then quickly dump in all of the flour into the saucepan and quickly begin stirring. Turn the heat off but leave the pan on the stove and continue to mix for a couple of minutes. Dump the dough into a bowl and with a wooden spoon continue to stir until all of the ingredients are well incorporated -- this will take some time, but keep going and make sure there aren't any lumps of flour in the dough. Once the dough no longer sticks to the bowl and is well mixed, allow to cool for 2 to 3 minutes so that it's not too hot when you proceed to step #2.

Next add half of the lightly beaten egg mixture into the dough, stir and mix vigorously until the egg is well incorporated into the dough. This will also take some time but don't proceed until the dough is well combined, once it is you can add the remainder of the egg into the dough and repeat until you end up with a thick and heavy dough.

Divide the dough into 6 smaller bowls so that it can be coloured with the rainbow tones. Start with one bowl, add the drops of colouring and stir until the colour is well combined and you have the desired tone. For red I used the 3 drops of red, blue was 4 drops, green were 4 drops, yellow 4 drops, orange was 2 red and 2 yellow, and for purple I used 2 red and 2 blue. But you can experiment with the colouring drops as desired. After you colour each small bowl of dough cover it with the kitchen towel to keep the dough from drying out.

For each coloured dough spoon it into a small plastic bag and work it into the corner of the bag, massage the dough to work out any air bubbles. Repeat this step for each coloured dough.

Line your work surface with plastic wrap. Grab the purple dough bag and snip off the tip of the corner so that you can squeeze out the dough into a long sausage like shape onto the plastic wrap. Next repeat with the blue -- but place it right next too the purple (do watch the video for a visual guide). Then do the green, then the yellow, then orange and finally red. Smooth out any bumps in the dough before lifting up one end of the lined up doughs and rolling over to create one large "tube" shape of the coloured doughs. Use the plastic wrap to help you smooth out the dough and remove any air pockets. Use scissors to snip off some of the plastic wrap off of one end of the rolled dough -- this will be what you place first inside the pipping bag. Before placing the dough in the pipping bag smooth out the exposed end of the dough. Carefully place the rolled dough (which should still be wrapped in the plastic wrap) into the piping bag. Gently squeeze and push down the dough until you can squeeze out some dough through the star tip. Cover the filled pipping bag with a kitchen towel and set aside.

Heat enough canola oil in a frying pan (you need at least 2 inches or 5 cm in your frying pan) until it reaches a temperature of 350℉ or 177℃. You can also tell the oil is ready by placing a wooden spoon into the hot oil and if it bubble around the submerged part of the spoon it's ready. Once the oil is hot enough, carefully start piping the churro dough into it -- careful not to burn yourself. Use either a knife or scissors to cut the long strips of the churros, dip the knife or scissors into the oil first before cutting off the dough so it doesn't stick to either. Don't crowd the pan with too many churros! Fry until just golden brown on the outside, it takes about 4 to 5 minutes if the oil temperature is correct. Carefully remove each fried churro with the metal tongs and place them on the paper towel lined dish to drain off any access oil. Only leave on the plate for a minute before rolling them in the cinnamon sugar. Roll in the sugar mixture until well coated the remove and set on serving dish. Continue until all of the churros are made.

Complete all of the steps above until you get to the end of #4. Heat your oven to 350℉ or 180℃ for 10 minutes, and line a baking sheet with either baking paper or a silicone baking mat. Pipe the churro dough from step 4 onto the baking mat by either making long churro strips or also creating fun shapes if desired. Again after piping each churro it's a good idea to use scissors to cut the dough. Churros won't expand much when baked so you can place them closer together -- just not pressed up against each other. Once your baking tray is filled, lightly splash a little bit of flour over the tray and churros -- it's said that the steam created by the water as it evaporates will help the churros puff up. Bake in the centre of the oven for 15 to 20 minutes or until they turn golden brown and feel a little crisp on the surface. Remove from the oven and allow to cool for a few minutes before brushing with melted butter, then leave one minute before rolling in the cinnamon sugar mixture and serving.