If the child is born before you come to Canada, your father has to declare him/her as an additional dependent on his application. You HAVE to contact the embassy that is processing the application, and the new baby will have to be added to the application. If you don't do this - and you try to finalize the application and "land" without the child, you will be banned forever from sponsoring that child. So, if the baby comes at any time between now and the issuance of the visas and landing, you must contact the embassy and notify them of the birth. Only if the baby comes after you "land" in Canada is it safe not to tell CIC. If that happens the child would be born a Canadian citizen and not have to be sponsored - otherwise s/he has to be sponsored, and that must happen on the existing application.
Sponsoring a grandchild means that your father will have to meet minimum income requirements, but it's possible (depending on which class they immigrating under) that income requirements have to be met anyway. The embassy will be able to give them additional information when you notify of the child's birth.
