I have two vies on this, my own view - and a suggested view for the original poster.
My suggested view for the original poster is this - after reading that rather curt reply from the catholic priest, i would seek out a baptism by another Christian church altogether. I would not baptise my child a catholic.
This priest is indirectly giving you terms. Firstly, he wants you and your wife to become active catholics. Secondly, he insists you indoctrinate a child with the catholic worldview. And yes, the word is INDOCTRINATION. Before you child even has reasoning and their own personality, you are to drum into them why catholicism is the so called "true faith". Any parent who brings up their child stiffly and blinkeringly in one faith and why that one is the only true one - only educating their child in the beliefs they themselves hold, is even called child abuse by some athiest academics like Professor Richard Dawkins. I must largely agree with him. That is not fair on your child. Your child has a right to make up their own mind, not have his world limited and prescribed from him in the beliefs you CHOSE to believe. Give your child that same right and choice.
I would never agree to those terms.
It also interests me how the soul of this child is not one of his priorities: he judges you and your wife first, and then reflects this on the child. Thats hardly what i would call Christian. The child is damned for the sins of the father, so to speak. I must say, my opinion of this catholic priest is very low. And if his words do indeed reflect the opinion of the catholic church, then my opinion of that is low too (although my opinion of the catholic church due to its history and persecution CANNOT be any lower than what it now is).
Now, my own view!

My mother did not baptise me or my older sister. Why? Because she believed it was my right to chose which faith - IF ANY FAITH AT ALL - i wished to follow. My mother told me that if she had baptised me an Episcopalian, what if i grew up and in my own soul wished to be a Presbyterian? Isn't it my right to chose my own faith rather than having the faith of my parents shoved onto me?
If i were you, i wouldn't baptise my children at all. Let your children decide when they are old enough.
However, i respect that you want your child baptised - so, if i were you i would look for a non-catholic Christian church that is far less indoctrinating and demanding.
Best wishes.