Grant Clarke, mayor of the small town of Rouleau where the former CTV comedy was filmed, said hundreds of people watched as flames engulfed the building.
The structure was used as the local supermarket Foo Mar T in the show that featured the fictional town of Dog River.
It had become home to a business manufacturing orthopedics.
Clarke said the fire was reported around 5 p.m. as 180 people attended an anniversary party at the nearby town hall.
"Someone came in and said there's smoke coming out of the adjoining business," said Clarke.
The fire had grown quickly by the time emergency crews arrived.
"By that time, there was too much smoke and heat. Really they weren't able to get into the building."
Police said no one was hurt and no other buildings were damaged.
Clarke said the flames were out by about 9 p.m., but fire crews worked overnight to put out hot spots.
Residents of the 500-person town who weren't at the party also came out to see what was going on.
"When the fire alarm went, they ran down as well," said Clarke, who added that his first reaction was one of disbelief.
One of the questions will be whether the business owner wants to rebuild, the mayor suggested.
"You're sad for the owners because you know them personally, and you're disappointed for the town as well, because it's another business in trouble."
There was no word on the cause, although the RCMP said they did not consider the blaze suspicious.
Brent Butt, the show's creator and star, acknowledged the fire on Twitter.
"Ok…so apparently the building that played the old Foo Mar T on CornerGas has burned down in Rouleau, SK. Hope no one was hurt," he tweeted.
Clarke said crews were waiting Monday for the fire marshal to arrive before they started the cleanup.
"The building is completely gone."
— By Clare Clancy in Regina