Litterally the same as a person holding a bond - Canada rings their broker, they sell the bonds and the money (USD dollars in this case) goes into their account. They can then do with that what they want - buy Gold seems to be a popular one at the moment, sell the USD's and buy EUR's, buy European bonds with the EUR's etc ... whatever takes their fancy.

Word of a specific central bank selling lots would a) be widely talked about on wall street within a few hours and b) be reported to the Fed & the Whitehouse.