The two killed Monday in the gunfire were a teenage girl and a man in his 20s, Toronto police Chief Bill Blair said. He did not provide the age of the child who was injured but said the injuries are "not life-threatening and the child will be fine."
Blair said it's unclear how many people actually fired shots, but there was more than one person responsible for the gunshots.
"It is the most serious crime of its kind that has ever taken place in the city of Toronto," he said.
Police said they had one "person of interest" in custody and were looking for other suspects. Blair said "the person of interest" was also injured in the gunfire.
"The only information I have is that it was handguns involved in this. We don't have information at this point in time about the weapons that were used, although one weapon has been recovered at the scene," Blair said.
Witnesses have been returning to the scene to speak with police after initially fleeing when the gunfire erupted, authorities said.
"The level of violence is something we have never experienced," said Blair, who described the incident as "unprecedented" in Canada's history.
ABC News Radio contributed to this report.