Before obtaining Canadian citizenship, to retain your German citizenship, you have to apply for a Beibehaltungsgenehmigung (BBG) from the BVA (Bundesverwaltungsamt). To get the BBG approved you have to show
1. That you keep ties to Germany, e.g. speak the language, travel to Germany, have relatives in Germany, have bank accounts or claims for social security or pensions in Germany etc.
2. That you will experience hardships as the result of not obtaining Canadian citizenship, e.g. jobs in your occupation are restricted to Canadian citizens only, a job that require you to travel frequently outside Canada and which may cause you to loose your PR status if you stay outside Canada for too long etc. etc.
The application is sent to a German consulate (Toronto ON, Vancouver BC - consulates, Winnipeg MB - honorary consul) or embassy (Ottawa ON) and they will check the application for completeness and assess whether they think it has a chance of being accepted. If everything is okay, they will forward the application to the BVA in Köeln where they will make the final decision. The whole process takes about 3 months depending on how many applications they process at the time and assuming your application is complete and they do not have to contact you for more documentation.
It costs 255 Euro and if approved you have to pick up the BBG in person at a consulate/embassy or an Honorary Consul.
The BBG is not valid until you have picked it up, so you MUST have it in hand before you take part in the Canadian citizenship ceremony!
So if you obtain Canadian citizenship without getting a BBG first, you will automatically lose your German citizenship. To renew your German passport from within Canada, you have to show (or send in a notarized copy of) your PR card or some kind of temporary permit for Canada. This way you prove that although you are living outside Germany, you are not naturalized in Canada. Once you are a Canadian citizen, you will no longer have your PR card and so your German passport application will be denied...
BBG Application Forms and Guides (in Deutsch):
http://www.canada.diplo.de/Vertretung/kanada/de/02/staatsangehoerigkeit/beibehaltung.html