Yes, and well... No?
You have freedom to play with the melody, but you cannot change the "fundamental character" of the melody. Essentially, the song needs to still be recognizable as the song that you are covering.
Section 115 of the Copyright Act states that “the arrangement shall not change the basic melody or fundamental character of the work…” So, doing an arrangement to put the song in a specific genre is okay (i.e. doing a reggae version of a pop song). However, the song needs to be recognizable. Again, seek qualified legal counsel if you are unsure whether your work meets this standard.
Can I change the melody?
