Because the PhD is a research degree, admissions committees want to see from your application that you'll be able to be successful in research. This is easily demonstrated through prior research experience, which many students get while completing a Master's thesis. There are other ways to get research experience for people with a Bachelor's degree.
If your motivation for doing a Co-op degree is financial, you might consider looking into other methods to get research experience. Perhaps you can work as a research assistant while taking courses, or, if your University permits, do your Co-ops in a research lab in the industry. You might even spend some time after the Master's degree as a research assistant in the industry or at a national research lab. A Co-op degree certainly won't preclude you from getting your PhD in the future.
But if your motivation for doing a Master's degree is just to position yourself for a PhD program, I would recommend putting research experience as your first priority, and evaluating the various programs you're interested in based on how likely you are to graduate having done interesting research. In addition to gaining the skills necessary to do research, research experience will help you determine what sorts of projects grab and hold your interest, which will make it much easier for you to find a place that you'll enjoy doing your PhD at.
So, to summarize, research experience is very helpful for getting into a PhD program, and a Master's thesis will certainly provide that opportunity, but a Co-op program won't preclude the opportunity for research experience, although it might make the path more difficult.
