MONTREAL - A homeless man and an innocent bystander heading to work are both dead after the Montreal police became involved in an early morning shooting downtown Tuesday.

Mario Hamel, 40, was the homeless man police were chasing during the incident just before 7 a.m. Tuesday morning. Police announced he had died just before noon.

Another 36-year-old man was also taken to hospital with gunshot wounds and police announced his death just after 6 p.m. Tuesday.

"We think that this person was going to work when he got shot by the police officer," said Sgt. Ronald McInnis of the Sureté du Québec, which took over the investigation in compliance with provincial law.

Police have yet to provide answers as to how or why this man was shot.

The incident began on Ste. Catherine St. when, according to eyewitness accounts, Hamel was cutting garbage bags and hurling trash into the street.

Witness Georges Hajjame told CTV Montreal's Derek Conlon that police were called to the scene, arrived without sounding their sirens and calmly got out of their car to confront Hamel.

At that point Hamel began waving around a knife and ran off, heading two blocks east and half a block south before stopping on St. Denis St. and Christin St., in front of the Université de Québec à Montréal.

Witnesses say they heard multiple gunshots at 6:40 a.m.

Terry Witwicki was on his way to work on René Lévesque Blvd., and looked up the street to see a man lying on one side of St. Denis with blood streaming from his head or neck, and on the other side of the road several officers were holding another man on the ground.

"We heard two shots, bang bang, like really quick, maybe 25 feet away from us," said Witwicki. "So we take a look and we see this fellow on the sidewalk with a pool of blood all around him."

One shooting victim was taken to Montreal General Hospital, while another was rushed to St. Luc Hospital.

Four police officers were taken to hospital and treated for shock, but three were released by 6 p.m. Tuesday.

Hamel was a regular visitor at the Old Brewery Mission homeless shelter, often stopping by for supper. The shelter's director Matthew Pearce said an incident like this will have an impact on the people who rely on the Old Brewery Mission every day.

"It sends a shockwave through the population," Pearce told CTV Montreal's Cindy Sherwin. "It's a destabilizing thing."

Pearce says homeless people and police in Montreal are still trying to work out a balance in their relationship.

"The relationship between the police in Montreal and the homeless in Montreal has been one of tension and stress over many years," he said. "That being said, the police have made specific measures and implemented initiatives to address that."

Police now have a specially trained squad to deal with chronic homeless issues and officers are taught to engage the homeless in dialogue to reduce tension.

But Pearce says that level of tolerance has some obvious limits.

"Anyone wielding a knife around in a public space constitutes a risk so they need to be handled appropriately," he said.

It turns out the Old Brewery Mission had to recently figure out how to handle Hamel themselves. About two weeks ago he caused a disruption during suppertime, one serious enough that staff decided to restrict his access to the shelter altogether.