No, this will not impact your application timeline. But, you have to inform or else if they ever find out you will be charged of information misinterpretation.
I have a question out of curiosity. Your child received Canadian Citizenship & Canadian Passport based on the fact that he/she was born in Canada. So, he/she is by birth Canadian, even though parents are non-Permanent Residents as of now ?
So, Canada still allows by birth Citizenship, even if parents are non-Permanent Residents at the time of birth ?