Emergency response team members arrived on the scene at the Bank of Montreal in Saanich, on Vancouver Island, near the border with the US state of Washington, around 11 am, law enforcement said.
"This remains an ongoing police incident with a heavy police presence in the area," Saanich police said on their website.
"Homes and businesses in close proximity to the scene of the incident have been evacuated due to the presence of a potential explosive device in a vehicle associated to the suspects."
Later, police said they were lifting a shelter-in-place order but that the block near the bank remained closed over the potential bomb.
The suspects were "heavily armed" and initial reports suggested they wore body armour, Saanich police chief Dean Duthie told a news conference.
Six officers were taken to hospital with gunshot wounds, some of whom would soon be released but others "sustained very serious injuries and have been taken into surgery," Duthie said.
Video posted on social media showed police officers and a police dog in pursuit on foot with the sound of gunshots blazing. Police have asked any witnesses to submit video evidence, CBC News reported.
"From what I know about that chaotic, tragic, dynamic, violent scene, the fact that no citizens were injured in any way is truly amazing," Duthie said.
Prime Minister Justin Trudeau said on Twitter he was "shocked and saddened" by the violence.
"I'm keeping the police officers who were injured in today's shooting - and their colleagues who also rushed towards danger to keep people safe - in my thoughts," Trudeau said.