Four people were hurt after shots were fired at a victory rally for NBA title winners Toronto Raptors, turning the parade into a stampede.
Canadian President Justin Trudeau and the winning Raptors team were on stage at the time on Monday.
Police said there were three arrests and none of the injuries were life-threatening.
Crowds of Raptors fans ran from the shooting as City Hall square was packed with tens of thousands of fans.
A million or more fans had earlier gathered in central Toronto for the parade, raising safety concerns over overcrowding.
Toronto police spokeswoman Allison Sparkes confirmed the shootings and arrests. Two firearms were recovered.
“We have no incidents currently under way. Crowds are dispersing,” she said.
Asked if it was a targeted shooting or terrorism-related, Ms Sparkes said the investigation was under way.
During a speech by one of the team owners, the host of the rally interrupted proceedings to say there was an emergency situation and asked for calm.
Prime minister Justin Trudeau, Toronto’s mayor, star player Kawhi Leonard and other players were among those on stage at the time. They remained in place and speeches resumed shortly after.
I hope all those injured in today’s shooting have a speedy recovery, and I’d like to thank the Toronto police for acting so quickly,” Mr Trudeau tweeted. “We won’t let this act of violence take away from the spirit of today’s parade.”
Mike Mudidi said he was enjoying the celebrations when he heard screams behind him that someone had pulled out a gun. He said he froze as people started running in all directions.
“I just grabbed my buddies’ hands and ran,” he said, adding he was startled but otherwise OK.
Earlier in the day, mayor John Tory urged every resident to celebrate the Raptors’ first championship and declared this “We The North Day” in Toronto, after the basketball franchise’s slogan.
Around 1.5 million fans withstood packed conditions to attend the parade. Nicolas Caramanna, 21, said the crowd started to get rowdy shortly after he arrived at 9am.
“I’m really hot and tired, but I’m going to stick around,” he said. “When else am I going to get a chance to do this?”
Many others chose to miss school or work. Cypher Sabanal, 15, said his mother let him miss school to attend the celebration.
“I actually have exams this week, but being here is worth it,” he said.
John Moreira called in sick at work so he could be part of Toronto’s first celebration of this magnitude since the Blue Jays won baseball’s World Series in 1993.
“I told my boss I wanted to be at the parade and he said there wasn’t much he could do if I called in sick, so that’s exactly what I did,” the 31-year-old said.
“I’m looking forward to seeing the whole team. They all work so hard and deserve all the fans being out here.”
As the parade inched forward — discernibly behind schedule — a number of Raptors marvelled at the fan response.
“It’s been amazing,” Leonard said. “Thank you Toronto, thank you Canada for the support, we did it.”