Investigators believe he was trying to steal the vehicle.
Durham Regional Police say the man walked into the McIntosh-Anderson-Kellam Funeral Home in the area of King Street East and Charles Street at around 1:20 a.m.
About an hour later, he drove a hearse through the garage doors.
CBC's Michelle Cheung reports that the man apparently drove the hearse through the doors and across the parking lot.
The driver dodged several police cars and crossed a three-lane road before jumping a sidewalk and eventually smashing into a concrete bench.
At some point during the encounter, the driver was shot by police.
He is being treated in hospital for non-life threatening injuries.
No officers were injured. Division Street and Bond Street East in the area were blocked off following the shooting.
Several shell casings littered the parking lot, the street and the sidewalk. There was also blood on the driver's side door of the hearse, and a shotgun lying near the vehicle was bagged as evidence.
Police have not released any other details including the man's name or any charges he may face.
The province’s Special Investigations Unit has six investigators probing the shooting.
Legislation requires the SIU to investigate any time someone is injured during an altercation with police.