If you are a Canadian Citizen, you do not need to establish residency but you need to establish you intend to move back to Canada when you are done the process (landing). If you are a Canadian Citizen, you can stay with your wife until she is landed, which might be nice for you.
If you are a Canadian Permanent Resident, you need to be in Canada to sponsor, but I don't think you need to establish residency, you just need to show that during the application process, you will be residing in Canada and not leaving (except for perhaps short vacations or business trips).
You do not have to have an income to sponsor you wife or her dependant children, but you do need to show that you will be able to support them and not go on welfare when they get here, so it is better to have a job (even a minimum wage job). For welfare, it is my understanding that pension, disability, EI, etc does not count as "welfare", it is only welfare itself that counts.