The fire started somewhere in the basement, according to Toronto Fire Services.
However, the basement was still full of water on Monday, and will have to be emptied before a full investigation can be done to determine the cause of the fire.
The fire marshal is not yet in a position to either confirm or rule out arson.
An employee of the Haymishe Bagel Shop reported the fire just after 10 a.m., and by the time firefighters arrived the building was in flames and had to be evacuated.
"Just after 11 a.m., part of the first floor had collapsed into the basement due to the heat and water from the fire," said Capt. Mike Strapko on Sunday.