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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.
 
IMM0008 is for /applicants/ to become permanent residents. The deceased are not eligible, nor are current permanent residents or citizens.
Thanks. I really wished I could get a definite official response regarding this. It would be heart breaking if my file is returned
 
Thanks. I really wished I could get a definite official response regarding this. It would be heart breaking if my file is returned
I have not heard of applications being returned because of differences of view on whether children should be in the IMM0008 (not saying it hasn't happened, but it's rare). I have seen IRCC write/require applicants to re-do the IMM0008 (where IRCC itself, sometimes, has asked that children who are already PRs or citizens be added).

Again: this is not complicated - deceased individuals cannot be sponsored. Of course they don't need to be added to the IMM0008.