If it is indeed Cytospora canker, this article (
https://www.canr.msu.edu/news/whats_going_on_with_blue_spruce) says that there are no effective chemical controls. Here's a copy and paste from that article:
"There are no effective chemical controls for Cytospora canker. Avoid wounding lower branches with lawn mowers. A very important management tool is to prune out and destroy cankers as soon as they are observed. Prune only during dry weather to avoid spreading spores to healthy branches."
For now, I would try pruning out that branch with the fungus. The bottom line though is that you'll need to try to determine what is causing the needle loss/fungus. If you have a hand lens, you can look for round, black fruiting bodies sticking out of the tiny pore-like openings (stomata) on both green and brown needles. Apparently, this is indicative of Stigmina or Rhizosphaera, but you'll need an expert (not me) with a microscope to tell the difference (
https://www.canr.msu.edu/news/whats_going_on_with_blue_spruce).
Wow, I'm in over my head here! I'm not sure where you are based, but if you're in New York, I'd try the local Cornell Cooperative Extension office. Also, see what you can learn from the articles I've shared. For example, it sounds like this summer, if it is something like Rhizosphaera, you should see needles turning yellow and reddish purple this summer (
https://aces.nmsu.edu/pubs/_h/H163/welcome.html).