Not exactly -- it's against the law to publish facts that the publisher knows to be false. So the standard isn't truth, it's honesty.
It's very hard to prove a journalist is being deliberately misleading. So it's only been used in the case of Holocaust deniers and even then the Supreme Court ruled that the law was not compatible with the Charter of Rights and Freedoms. The government has shifted the false news law to being a regulatory requirement for broadcasters, but it's unclear whether this isn't still unconstitutional.
FOX News, in my estimation, does seem to cross the line when it comes to repeating statements they know (or should know) to be false, often over the course of several days. So I can see why they want even the regulation withdrawn.
More details: http://openmedia.ca/blog/false-news-and-crtc-who-asked-what-...