A gunman opened fire on a Toronto street filled with restaurants late last night, killing two people and injuring 12 others, including a young girl, authorities said.

The suspected shooter was later found dead.

The girl was in a critical condition, Toronto Police Chief Mark Saunders said.

"We are looking at all possible motives ... and not closing any doors," he told reporters at the site of the shooting.

Paramedics, firefighters and police converged on the scene in Toronto's east end, which has many popular restaurants, cafes and shops.

Police said the gunman used a handgun. Earlier reports said nine people had been shot.

The gunman, a 29-year-old man, exchanged fire with police, fled and was later found deceased, local media reported.

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The incident comes with Canada's largest metropolis concerned over a surge of shootings to more than 200 this year. About two dozen have been fatal.

Canada traditionally has relatively low levels of gun violence, particularly compared with its neighbour the United States.

Mayor John Tory said the incident is "evidence of a gun problem" in Toronto.

"Guns are too readily available to too many people," Mr Tory told a news conference two hours after the shooting took place.

He added that details of the latest incident remained sketchy.

"We have to figure out what happened here. We don't know," he said.

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Last week, Toronto police started implementing the enforcement component of their "gun violence reduction plan".

That includes around 200 additional officers on shift in particular neighbourhoods between the hours of 7pm and 3am, which is when most shootings occur.