Three people are dead after a gunman shot 14 people, including a young girl, in Canada, police say.

The incident happened on Sunday local time in a Toronto neighbourhood known as Greektown.

"Other than the shooter, we have a young lady that is deceased," Toronto police chief Mark Saunders said.

Mr Saunders also said the young girl was in critical condition.

Toronto Police later confirmed a second victim died from the mass shooting.

Police spokesman Mark Pugash said the condition of the other victims was not yet known.

He said it was too early to say whether the shooting was an act of terrorism.

Witnesses heard many shots and described the suspect walking past restaurants and cafes and patios on both sides of the street and firing into them.

John Tulloch said he and his brother had just gotten out of their car when he heard about 20 to 30 gunshots.

"We just ran. We saw people starting to run so we just ran," he said.

People leave an area taped off by the police near the scene of the mass shooting in Toronto. ( Reuters: Chris Helgren )

An army of police, paramedics and other first responders soon descended on the scene, while local residents, some in their pyjamas, emerged from their homes to see what was happening.

Toronto councillor Paula Fletcher told the CP24 media company she heard the gunman was emotionally disturbed.

"It's not gang-related. It looks like someone who is very disturbed," she said.

Another city councillor, Mary Fragedakis, also said she heard the gunman was disturbed.

Ms Fletcher said for it to happen in an area where families were gathering for dinner was a tragedy.

Toronto police deployed dozens of additional officers over the weekend to deal with a recent spike in gun violence in the city.

Police escort civilians away from the scene of the shooting. ( AP: Frank Gunn )

AP