It is the latter. The rule is applying to everyone as of 2009. What it means is that for children born abroad after that date in 2009, they will be Canadian from birth automatically if they have one parent who was born in Canada or one parent who immigrated to Canada and became a citizen before their birth.
If it's their grandparent who falls under one of those categories, then they are considered the second generation born abroad and they are not automatically citizens from birth. Their avenue to citizenship is through the permanent resident process, followed by a grant of citizenship.