1. You don't have to "apply" citizenship for your child. Your child's birth certificate is good enough.
2. If the child is born outside Canada, you would have to apply for a visit visa for your child and then 'sponsor' your child to live in Canada (long process).
3. Either way...You are blessed with a child! Advantages of (1): You do not have to apply for your child to enter/leave Canada at any time. Advantages of (2): You and your wife may be more comfortable having the child born in a known place surrounded by known people, especially if you do not have many relatives here in Canada.
Congratulations to you and your wife, Farzad42.