what happens to my iCloud storage if I cancel my iCloud storage plan

According to people who have posted here in the forums about downgrade experience, you will have 30 days grace to move your files somewhere else for safekeeping. After that, your data will be purged to get your used storage down to the default free 5GB limit.

Then you lose the storage, and if you're storage is over 5GB, you won't be able to sync or backup to icloud.

You may lose data as well.