Ontario Provincial Police received a call at 9:30 CT that a small plane had gone down in the bush north of the city.
It appears the Minnesota-registered Cessna 180 crashed upon takeoff from Trout Lake, according to the Transportation Safety Board.
Kelly Huff, a Winnipeg man who owns a cottage on Trout Lake, told CBC News he heard the plane take off, followed by the sound of the engine dying and then the aircraft crashing into the bush.
Huff said he and his neighbours jumped into their boats and rushed to the crash site.
"We could hear someone yelling for help. We crashed through the bush, up a hill, and found the plane," he told CBC News.
"Fortunately all three occupants were alive. However, two of them were in pretty bad shape."
OPP say the 78-year-old male pilot and a 62-year-old female passenger were seriously injured in the crash, while a 44-year-old male passenger was not hurt.
Huff said the injured individuals are longtime friends — Art Martin and Linda May — from the Duluth, Minnesota, area, who were heading out for a fly-in fishing trip with Martin's son that morning.
All three people were taken to hospital in Kenora, but Martin was later being transferred to Thunder Bay while May was being transferred to a facility in Duluth.
The OPP and the Transportation Safety Board are investigating the incident.
Trout Lake is about 40 kilometres northwest of Kenora, which is located about 190 kilometres east of Winnipeg.