The boat was seen engulfed with flames close to Science World on Friday afternoon.
Fire crews are on scene and all passengers have been reported as being clear of the burning boat.
Brianne Ford was sitting on the patio of a local restaurant when she and her friends saw smoke on the water.
"There was lots of smoke," she told CBC News. "We saw coast guards come in."
Ford says she didn't see any of the people caught up in the fire, but did see those rescued being taken away by dinghy.