Crews at the home at 63 Maria Street were excavating the basement Wednesday when it became apparent late in the afternoon that something was wrong. Firefighters arrived at the scene after a neighbour called 911. The home was then evacuated, as were four neighbouring properties on each side.
A fence has been erected around the house, and demolition will begin as early as Friday. The homeowners, who did not want to speak to CBC News, will not be allowed to return to get their belongings because officials say it's too dangerous.
City officials said contractors were underpinning the basement.
"I don't want to speculate and say it's a contractor error," said Mark Sraga, a building official with the City of Toronto. "We're not sure exactly what occurred...From what we've seen, they did have permits to do the work, which is the first step of a responsible contractor."
A lawn sign indicated that FBR Waterproofing Inc. had been working at the house. The company declined a request for an interview.
Two investigators from Ontario's Ministry of Labour were also at the scene on Thursday.
Gas and power lines were cut as a precaution.
Charlie Gatt, whose parents own the affected home, lives next door.
"Of course I'm worried about them. One, where are they going to go? He has medication in the house that he needs to take," Gatt said.