First, yes, you can use any phone you want with prepaid - I’m currently using the Note 20 Ultra. So that’s not a problem.
However, Koodo won’t allow you to buy just any phone from them without a plan - so you may need to look elsewhere and buy a phone outright. Apple and Google are usually the best stores to buy phones outright, depending on whether you’re into iPhone or Android :)
If you change your mind and you would like to change your plan from a prepaid plan into a postpaid plan (with the new phone XR), you could follow this guide https://www.koodomobile.com/en/help/moving-prepaid-postpaid-monthly-service
Basically, you would have to register a new postpaid account and port your prepaid number into the new postpaid service.
People often choose to buy phone from carriers because they offered extra discount on phone and plan. It might be a better deal over the 2 year period.