The water level relative to the shore will decrease. Inside the boat the rock is pressing down on the canoe and thus pushing up the water around it. The amount of water displaced is equal in weight to that of the rock. For example, a 10 pound rock will displace 10 pounds of water upward. When the rock is thrown overboard the weight will not matter but rather the volume of the rock. So the rock will push upward an amount of water equal in volume to the rock. The mass of a rock is greater than that of water so the rock displaces more water pushing down on it than in it. So the level of the lake will be higher with the rock in the canoe than at the bottom of the lake.