Christians on earth – who are living “in Christ” – are saints.
We believe what St. Paul and other New Testament writers mean when they use the term.
From the Catechism of the Catholic Church 823 :
"The Church, then, is “the holy People of God,” and her members are called “saints.”
*that means not just those in heaven!
And from Pope Benedict XVI:
“In his First Letter to the Corinthians, St Paul addresses “those sanctified in Christ Jesus, called to be saints together with all those who in every place call on the name of our Lord Jesus Christ” (I Cor 1: 2). Indeed, Christians are already saints because Baptism unites them to Jesus and to his Paschal Mystery…”
(and then discussing becoming --more holy --more conformed to Christ he continues…)
“…but at the same time they must become so by conforming themselves every more closely to him.”
“Sometimes, people think that holiness is a privileged condition reserved for the few elect. Actually, becoming holy is every Christian’s task… The Apostle writes that God has always blessed us and has chosen us in Christ “that we should be holy and blameless before him… in love” (Eph 1: 3-5). … The “Way” is Christ, the Son, the Holy One of God: “no one comes to the Father but by me [Jesus]” (cf. Jn 14: 6).”
Pope Benedict XVI 1 November 2007
w2.vatican.va/content/benedict-xvi/en/angelus/2007/documents/hf_ben-xvi_ang_20071101_all-saints.html
Now over the centuries yes another use of the term saints developed. Saints has been yes used for those who have lived as saints in a heroic way (by the grace of God of course).
And yes later a process of canonization developed to recognize them, honor them and propose them as special models for the Christian faithful in following Christ.
Thus one can say there are saints and also Saints in the canonized sense or at least the recognized sense (they were recognized long before the process of canonization developed…especially Our Lady, the Apostles and Martyrs).
Those living in Christ on earth etc are saints, and yes those who are in heaven - including newly baptized babies who are in Heaven.