You will be called for an interview and asked to explain why they should give you citizenship when you did not pass the test. From the interview, they decide if to give it to you or not.
You actually get more chances by re-applying if all preliminary attempts fail. Read here: http://www.theglobeandmail.com/news/national/how-applicants-are-stumbling-on-the-final-step-to-becoming-canadians/article4382633/