You aren't saying "No", you're saying, "What drops?"
People who say, "No." are being hard to work with. People who engage honestly with the CTO who is trying to change priorities is someone who you actually want on your team, the only kicker here is that the conversation ends with, "Okay so what gets shelved for this new thing we've been talking about, or should we finish out what we're currently doing before jumping on this?"
There is a lot of advice out there that says, "Say no!" but you can't take it at face value; no reasonable person is suggesting you respond to a request from leadership with a single word answer. You need to have a higher EQ than that, but what you can do is find ways of explaining the cost of what they're asking in a way that is effectively no, without actually just saying one word and then refusing to elaborate.