No, Jigglypuff, Wigglytuff, Articuno, and several more don't speak human and have to be translated with subtitles. And I think the issue moreover is that the majority of pokemon speak their own language and the humans can just all understand it for some reason, since there was a big deal made over Clefairy and Squirtle's ability to talk.

And the "doesn't follow the same canon as the rest of the franchise" doesn't make sense. None of these splitoffs follow the same canon as the other splitoffs, even if they're based on another (ie, Special and the games, for instance).

So mermaids *are* canon...in MPJ. They exist, and are shown in no uncertain terms. Hazel isn't even that surprised to see one, she's more "Oh, a mermaid!". Just because they don't show up in any other Pokemon story doesn't lessen their existance in MPJ.