Ur kid has dual-citizenship

Your child will have US citizenship by birth. As you're Canadian, your child will also have Canadian citizenship. However, US only considers your child as solely US citizen so he/she has to show US passport when he/she enters US. He/she can use either Canadian or US passport to enter Canada.

Your child will not lose his/her US citizenship even if he/she chooses to stay in Canada.

I'm not a lawyer and I know this by personal experience. I know people similar to your child who stays in Canada are still US citizen and have to file US income tax return every year!