Being a sponsor in Canada means that your spouse will be able to remain in Canada until a decision is made on the application. However, it also means that they cannot exit the country, or their application will be considered abandoned.
Further, pending approval in principle, your spouse may also qualify for an open work permit. This means that they’ll be able to work for any employer in Canada while their applications are being processed. This option does not exist for the overseas application.
Processing times, however, are much more extensive than overseas sponsorship. Some applications can take up to two years at a time. On the other hand, the overseas application is more often than not less processing time.