Jason Pominville scored on a breakaway three minutes into overtime Wednesday as Adler Mannheim shocked Canada with a 2-1 victory.
Tyler Seguin scored the lone goal for Canada in the third period as the roster loaded with NHL talent had trouble finding its scoring touch, despite generating plenty of chances.
"There's no panic in us right now," said Canadian forward Matt Duchene. "We all think we played a pretty good game, there were lots of bounces and opportunities that we just weren't able to put in."
Pominville, a locked out member of the NHL's Buffalo Sabres, ripped a low shot past Canadian goalie Jonathan Bernier to give the top team in the German league a surprising victory.
"I know Bernier a little bit, so there was a lot of mind playing going on in the moment," said Pominville after the game. "I'm just glad it went in to get the big victory for our team."
First played in 1923, the Spengler Cup annually pits Davos and Canada against four European club teams in a six-day tournament in Switzerland.
Dennis Endras made 34 saves for Mannheim, including a breakaway stop on Patrice Bergeron moments before Pominville's winner.
"You can't expect to win against Team Canada in the Spengler Cup," said Endras. "All of us battled hard for 60 minutes, we blocked a lot of shots to prevent their chances and it's just awesome to get the points."
A fast-paced contest with numerous chances on both sides, Mannheim opened the scoring on the power play with 4:06 remaining in the first when Adam Mitchell tipped home a point shot past Bernier.
Canada fought back hard, but the lineup that includes NHLers Jason Spezza, John Tavares, Sam Gagner, Jason Williams and Jason Demers couldn't find its range against Endras.
"Give Mannheim a lot of credit," said Duchene. "They played well defensively and their goalie made a lot of great saves."
Canada looked shaky playing in their own zone in the first period, failing to clear and being pushed off the puck several times. But the defence stabilized as the game wore on and most of the action took place in Mannheim's end.
The line of Spezza, Tavares and Gagner generated plenty of scoring chances, while the combination of Seguin, Bergeron and Byron Ritchie provided Canada with its only goal.
Bergeron found his Boston Bruins teammate with a cross-ice pass at 9:30 of the third and Seguin wired a shot past Endras on the power play.
"We made Canada work hard for their opportunities," said Pominville. "With the skill they have, you can't afford to break down and we didn't do that very often tonight."
Canada carried the play for the rest of regulation but couldn't find a way past the Mannheim goalie before Pominville ended it in the extra period.
"We battled back from behind and put ourselves in a decent position to win," said Team Canada captain Ryan Smyth. "There's a lot of positives we can take from this… and we're in control of our own destiny."
Canada earned a point in the overtime loss and now faces tournament hosts HC Davos on Thursday. Though they automatically have a spot in the elimination round, a win would give them a chance to go directly to the semifinals.
"For coming together from all different parts of the world just a few days ago, we played a strong game," said Smyth. "We've got a really decent group of guys and it's just about putting it all together going forth."