If a U.S. citizen legally immigrates to Canada, can he or she retain
the U.S. citizenship?

Dear Real, 

First of all, you haven't mentioned if this person is going to apply
for Canadian citizenship. One doesn't have to be a Canadian citizen in
order to live in Canada: sometimes it is possible to receive a
permanent (or temporary) permit to live in Canada.

However, if someone applies to become a Canadian citizen, they are
applying in fact for a second citizenship: can an American have dual
nationality?

Canada enables dual nationality
Dual Citizenship 
<http://www.cic.gc.ca/english/citizen/dualci_e.html> 

The State Department site states that: 
"A U.S. citizen may acquire foreign citizenship by marriage, or a
person naturalized as a U.S. citizen may not lose the citizenship of
the country of birth.U.S. law does not mention dual nationality or
require a person to choose one citizenship or another. Also, a person
who is automatically granted another citizenship does not risk losing
U.S. citizenship. However, a person who acquires a foreign citizenship
by applying for it may lose U.S. citizenship. In order to lose U.S.
citizenship, the law requires that the person must apply for the
foreign citizenship voluntarily, by free choice, and with the
intention to give up U.S. citizenship." (SOURCE: Dual Nationality,
<http://travel.state.gov/travel/cis_pa_tw/cis/cis_1753.html>).

While this is the policy de-jure (in theory), in practice one could
retain the US citizenship when applying for a Canadian one.

See, for example: 
Rich Wales - Dual Citizenship FAQ: Dual Nationality and United States Law 
<http://www.richw.org/dualcit/> 

Questions and Answers from  Rich Wales' site
<http://www.richw.org/dualcit/faq.html#noway> 

I hope this answers your question. Please contact me if you need any
clarification on this answer before you rate it.

Hi real,

Just thought I'd put in my two cents since I personally am very
familiar with Canadian/US dual citizenship. If you immigrate to
Canada, you will keep your US citizenship by default (there's nothing
special that you will need to do to keep it). As  politicalguru's link
states, "In order to lose U.S. citizenship, the law requires that the
person must apply for the foreign citizenship voluntarily, by free
choice, *and with the intention to give up U.S. citizenship*." In
other words, you have to take steps to lose your US citizenship, not
to keep it.  Being a citizen of North America has many advantages (you
can work in either country at will). If your children are born in
Canada, they will be US citizens too. Be sure to visit the nearest
American Consulate to register their births while they're still
infants (it's easier to do it early rather than waiting). I know one
young man who gets some great summer jobs in the US, all because of
his dual citizenship. One downside is, you'll have to file income tax
to both countries (the US allows you to earn US$80,000 in Canada
before asking for any money).

Hope that helps!
hummer