It wasn't exactly a "hoax" though, more like sensationalized reporting. Like "so-and-so identified a site where we believe there could be bodies buried" turned into "mass grave uncovered"

Some potential burial sites were investigated, no bodies were found. Unmarked graves in association with residential schools certainly have been found in Canada, and since proving a negative in regards to these claims is untenable, the media is generally reluctant to say "see, there were no mass graves after all"