Fredericton is in New Brunswick province, about 50 miles northeast of the US border with Maine.
It happened in the Brookside Drive area where there are a number of shops and houses.
At least four people are reported to have died during the incident that occurred at 8.20am local time (12.20pm GMT).
Robert DiDiodato, who lives on Oakland Avenue, which connects to Brookside Drive along the city's north side, told U.S. television network CBC he heard a series of "firecracker" sounds at about am.
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"Doors are locked and everybody's inside", he said.
The Fredericton resident said he heard a series of "firecracker" sounds around 7 a.m.
"Police continue to on scene of a shooting on Brookside Drive".
"It was sort of like a pop, pop, pop, pop".
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