I can't find anything suggesting that Canadian Hemlocks are poisonous to other plants, I am thinking they may have confused it with the poisonous hemlock( not a tree but a biennial). Maybe it is just a fertilizer and water problem.
This site is pretty long, but it is mostly pictures, with some good information. You might want to skip over the native plant listing and go further to the bottom to the list of non-native plants that work well under trees.
http://www.extension.umn.edu/g...
