I don't know if the consulate in Korea would do it the same way as the one in Hong Kong. Basically, the other option you have is that your partner/spouse (does not have to be a PR or Canadian) acts as the applicant for your child's passport, and you as the Canadian citizen can then be the guarantor. This overcomes the difficulty of finding a Canadian citizen who can act as the guarantor. I was told that this is possible at the HK consulate, although I did not have trouble asking my Canadian friends to be the guarantor for my children.
I think if you read through the application for a minor's passport, it says the Canadian parent can act as guarantor, but it was not clear that a parent who is not a PR/citizen can be the applicant on behalf of the child, as to free up the Canadian parent to become the guarantor. I guess it makes sense, because let's say the Canadian spouse is not available or gone, then there's only the non-PR/citizen parent left.
Also, if this is the first time for your child to apply for the passport, I am not sure if this applies or only for passport renewal for the child.
So back to your original question about "in lieu of guarantor". I've also gone through the a few years back when it was difficult to find suitable guarantors. The process could have changed, so I am stating what used to be the case a few years ago. Basically the applicant signs an oath instead...that's what that "in lieu of guarantor" document is. This is done right there when you submit the documents. There was no extra charge, although the consulate said that basically the next time I apply for my child, it is expected that we would have a guarantor (at the time, the list of acceptable guarantors consists of a narrow set of professions like doctors and lawyers) because we should be able to find a guarantor in 5 years. With Canadian citizens being able to act as guarantors now, it's basically not an issue anymore.