Authorities were called to the three-storey home at 3111 Jean Girard St. near Atwater Avenue around 9:30 p.m. ET Sunday.
According to the City of Montreal's real estate records, the home is listed as belonging to the Jean Girard Residence Trust. Its most recent evaluation valued the residence at at $1,174,000.
Ben-Menashe, who claims to be a former spy for the Israeli government, is an international lobbyist and believed by some to be an arms dealer.
Montreal police spokesman Simon Delorme said investigators believe the fire was intentionally set.
"There's someone – a suspect – [who] was seen leaving the house, leaving the area just a few seconds before," he said.
It took a little more than two hours and about 80 firefighters to control the flames.
No one was hurt but the home was heavily damaged.
Ben-Menashe has been tied over the years to different foreign governments including Israel, Zimbabwe and Iran.
He was charged in the United States in 1989 with trying to sell military transport planes to the government of Iran, but he was acquitted.
Dr. Arthur Porter, former head of the McGill University Health Centre, resigned as chair of the Security Intelligence Review Committee (SIRC) last November following reports about his business ties to Ben-Menashe.
The National Post reported that Porter had given Ben-Menashe $200,000 to work on a $120-million deal for a mining project in Sierra Leone – Porter's native country.