I heard it was non-canon.
"Did somebody say
cannon?!"
As far as I'm concerned, there isn't any canon within the Muppets. They are more often than not considered as actors rather than characters, because every time they take part in a production, although they show their personal traits, they aren't always playing the same version of themselves or their lives.
Behind the scenes, Miss Piggy would tell you that she grew up on a farm, witnessed the passing of her father at a young age, and enrolled in Charm School as a teen. Any on screen incarnation of Miss Piggy would either tell you otherwise, or not tell you at all, depending on the script.
Kermit's Swamp Years is probably as canonical as The Muppet Movie (Kermit calls it an approximation on how the Muppets met eachother) or Muppet Babies (which is all just a figment of Miss Piggy's imagination) in that it's not really the true story of Kermit's childhood. What the truth is, I'm not too sure. Some other well read Muppet fan might know the answer, but as for me, I've only heard Kermit tell of his tadpole days in passing reference.
As for the content of the movie itself, as
@Drtooth has said many a time, the fact is that it was merely a recycling of a pitch for a preschool series starring a young Kermit and other frog kids who attended school. This was something a bit different to me than what the Muppets usually did. Kermit's Swamp Years feels more like something that should have been on Nickelodeon in the 90s/early 2000s rather than a bonafide Muppet movie.
In spite of its lack of original songs (apart from the enjoyable "Life As A Pet") and being only half-Muppety, Swamp Years is really not that bad as everyone likes to say it is. I'd even go as far as to say the same thing with A Very Merry Muppet Christmas or Muppets Oz; although one was littered with almost as many pop culture references as a typical Family Guy episode and the other was the result of an advertising campaign for a Muppets reality show that never got picked up (and featuring a nippled tin Gonzo -- although the Muppets have done adult humor before, that just seemed a bit surprisingly low brow) despite their quirks they were still very enjoyable Muppets productions.