The victim critically injured in the Canadian city’s Greektown district is a girl of eight or nine, they add.
The gunman is dead, reportedly killed in an exchange of shots.
The attack erupted on Danforth Avenue on Sunday evening, when the area was teeming with people, Canada’s Globe and Mail newspaper reports.
Toronto reels after weekend gun violence
The motive for the shooting, which reportedly targeted at least two cafes or restaurants, is still unclear.
In a video clip shared by Canadian media, a white man wearing a dark cap and dark clothing and carrying a shoulder bag can be seen stopping on a pavement and pulling out a handgun before firing shots.
Some of the victims were treated at the scene, while others were taken to local hospitals.
Toronto Mayor John Tory condemned the “despicable” attack on “people innocently enjoying a Sunday evening”.
Gun violence is much rarer in Canada than over the border in the US, but Toronto has seen attacks increase dramatically in recent years.
Shootings in the city over a holiday weekend earlier this month led to Mayor Tory saying he was working to get more police patrolling the streets.
Emergency services were called out just after 22:00 (02:00 GMT Monday). The site of the attack is a piazza with a fountain that is popular with local people and was busy at the time, the Globe and Mail writes.
A number of people were reportedly hurt in a cafe called the Demetres, while others were hit in the street.
Andrew Mantzios had been drinking coffee with friends by the fountain when he heard shots and turned around to see the gunman coming towards his group.
“He had this horrible expression on his face,” Mr Mantzios was quoted as saying by the paper.
The gunman fired at a crowd of people waiting to cross the street, he said.
“And then a lady tried to run and she fell down. He turned around and shot her point blank, two or three times.”
Mr Mantzios and his friends dropped to the ground for cover and watched as the attacker criss-crossed the avenue, shooting into businesses.
Other eyewitnesses said they heard volleys of shots, with pauses in between.
“It would shoot, there’d be a pause, we heard more shooting, and then a pause and then more shooting,” John Tulloch, who was walking on the avenue with his brother at the time, told the paper.
“There must’ve been 20, 30 shots, altogether. It was a lot. We just ran. People weren’t yelling but I think everyone was concerned,” he added.
“It just seemed very surreal, almost like it wasn’t really happening. But everyone was sort of moving and going away. It was hard to believe it was real.”
A driver, Jim Melis, told the paper that a white man wearing a black cap and a bandana had fired shots through a cafe window.
The gunman had run out in front of his car, crossing the street, before pulling out his gun, he said.
Jody Steinhauer told CBC News she had been with her family in a restaurant in the area when she heard what sounded like 10 to 15 blasts of firecrackers.
“We started to hear people scream out front,” she said.
Paramedics could be seen performing CPR on the injured around the piazza afterwards, the Globe and Mail reports.
After police sealed off the scene of the attack, upturned coffee cups could be seen being used behind the ticker tape to mark evidence.
Toronto police confirmed the gunman had been killed but gave no other details. It is unclear whether he was shot by police or killed himself.
Mayor Tory appealed for people not to draw any conclusions before there was further information from the police.
Jessica Young, an employee at the Second Cup cafe, said she had seen the gunman’s face before he fired through the window.
“I look to my side and see the shooter through the window,” she told the Toronto Star newspaper.
“He sees me, or he sees my co-worker or someone, and points the gun and shoots through the window. He was probably no taller than me, wearing a black baseball cap, dark clothes. He had light skin. I think he had short facial hair. That’s all I could make out.”
Mayor Tory said the attack was “evidence of a gun problem” in the city.
“Guns are too readily available to too many people,” he told reporters.
Police data show the number of shootings in Toronto more than doubled between 2014 and 2017 – from 177 to 395.
While it is not known how the Greektown gunman obtained his weapon, there has long been pressure to tighten gun control in the country.
Prime Minister Justin Trudeau’s ruling Liberal party wants tougher background checks, including screening people with a history of violence.
Gun control has often sparked divisive debates in Canada, which has a large rural population where guns are widely owned and used.