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No, do not include the deceased child in the IMM0008. If I remember correctly, there is a way to denote that an individual is deceased in the 5406 form. If not, put this in a letter of explanation.

Warning that likely IRCC will ask for death certificate (or similar evidence) - include in your application packet.
Thank you. I have received conflicting information regarding this. I want to be sure to avoid a returned application
 
Thank you. I have received conflicting information regarding this. I want to be sure to avoid a returned application
IMM0008 is for /applicants/ to become permanent residents. The deceased are not eligible, nor are current permanent residents or citizens.