A hardware store fire in Ottawa that spewed toxic smoke has forced the evacuation of a seniors home and left at least two dozen people homeless.

An emergency order for nearby residents to stay inside because of the acrid smoke will remain in place overnight, and firefighters were planning to remain on the scene, fire officials said.

The officials said they will reassess the situation in the morning.

Smoke began billowing out of the Beechwood Avenue Home Hardware in the New Edinburgh neighbourhood just before 10 a.m. ET on Wednesday. More than 130 firefighters called to battle the blaze throughout the day.

City of Ottawa Emergency Management told residents who live in the following neighbourhoods to remain in their homes with doors and windows sealed: Crichton to Dufferin Road, Rideau Terrace to Acacia, Marier Avenue to Dagmar Avenue, and Landry Street.

People who need more information are being advised to call the city at 311.

The city says people in these areas should also close their fireplace flues and turn off their furnaces.

"What the fire department is emphasizing is that this smoke is extremely toxic," said CBC Ottawa's Evan Dyer, who was using a gas mask as he reported from the scene. "The substances that are burning in there are all kinds of household chemicals."

He said the smoke changed colour throughout the day, turning black, yellow and white at various times.

At least two dozen people, mostly university students, have been left homeless and 10 adjacent businesses have been lost.

A nearby retirement residence, the New Edinburgh Square, home to 150 people, was evacuated and seniors were taken to the Good Companions long-term care facility at 670 Albert St. One of the seniors was taken to hospital with symptoms of smoke inhalation, Dyer said.

Many of the seniors have since been picked up by family members, while others have been taken to hotels. Police said it is not known when they will be able to return to the home.

Toxic smoke from the fire changed colour throughout the day. (Brian Goldschmied/CBC )

Fire may have started with charcoal

A firefighter told CBC News they believe the basement of the hardware store contained self-starting charcoal, paint, paint thinner and propane tanks.

The smoke from the fire was so heavy, one official told CBC News, that during the early hours of the blaze firefighters had used 240 oxygen tanks – the most he’s seen in 20 years.

No official cause has been identified, but a fire official told CBC News the fire began with charcoal stored in the basement of the hardware store. An employee said he had stacked dozens of bags of the charcoal, and the fire started in the same area about five minutes later.

When he was unsuccessful in his efforts to put out the blaze with a fire extinguisher, the fire department was called in at 9:54 a.m. Fire crews arrived three minutes later.

Mark Clement, the owner of the Home Hardware, said he couldn't believe what had happened. "It was a dream for me to have a business … and now we'll need to start all over again," he said.

Clement said the six employees who were in the store are all in good condition.

The store had been preparing for a third anniversary sale in May and had ordered summer stock including barbecue equipment, charcoal and patio furniture, which was all being stored in the basement.

Helen Carter, one of the landlords of the building, said the most important thing was that everybody was safe. "Everything else is insured and can be replaced," she said.

Firefighters worked to remove artwork from a gallery after a blaze broke out at an adjacent hardware store. (CBC)

Smoke could also be seen at the adjacent organic food store, a jewelry repair shop and the New Edinburgh Art Gallery at 25 Beechwood.

Gallery owner Luc de Celles estimated the value of the collection in the gallery, which includes some works of the Group of Seven, could be close to $1 million. He said there has been a lot of damage and doesn't know what might be salvageable.

"They are one-time pieces, so I don't know what I'm going to do," de Celles said.