The US National Hurricane Center (NHC) said the centre of the storm, downgraded to Post-Tropical Cyclone Fiona, was now in the Gulf of St Lawrence after racing through Nova Scotia.
After taking its toll on Nova Scotia and Prince Edward Island, the storm battered Newfoundland, but is now likely to weaken, the NHC said.
Port aux Basques, with a population of 4067 on the southwest tip of Newfoundland, declared a state of emergency and is evacuating parts of the town that suffered flooding and road washouts, according to police, Mayor Brian Button, and resident Rene Roy.
Several homes and an apartment building were dragged out to sea, Rene Roy, editor in chief if Wreckhouse Weekly in Port aux Basques, told the Canadian Broadcasting Corp.
"This is hands down the most terrifying thing I've ever seen in my life," Roy said. Many homes are "just a pile of rubble in the ocean right now... There is an apartment building that's literally gone. There are entire streets that are gone."
Police are investigating whether a woman had been swept to sea, CBC reported.
"This is hitting us really, really hard right now," Button said in a Saturday morning video posted on Facebook in which he urged residents to stay indoors or, if asked, to evacuate. "We have a fair bit of destruction in town... We do not need anyone else injured or hurt in during this."
Fiona, which nearly a week ago battered Puerto Rico and other parts of the Caribbean, killed at least eight and knocked out power for virtually all of Puerto Rico's 3.3 million people during a sweltering heat wave.
Fiona made landfall between Canso and Guysborough, Nova Scotia, where the Canadian Hurricane Centre said it recorded what may have been the lowest barometric pressure of any storm to hit land in the country's history.
Ian Hubbard, meteorologist for the Canadian Hurricane Centre, told Reuters it appears Fiona lived up to expectations that it would be a "historical" storm.
"It did look like it had the potential to break the all-time record in Canada, and it looks like it did," he said. "We're still not out of this yet."
Storms are not uncommon in the region and typically cross over rapidly, but Fiona is expected to maintain hurricane-force winds until Saturday afternoon and impact a very large area.
Some 79 per cent of customers, or 414,000, were without power in Nova Scotia, and 95 per cent, or 82,000, had lost power on Prince Edward Island, utility companies said.Â
Police across the region reported multiple road closures. The region was also experiencing spotty mobile phone service.
Canadian Prime Minister Justin Trudeau delayed Saturday's departure for Japan, where he was to attend the funeral of former Prime Minister Shinzo Abe, to receive briefings and support the government's emergency response, Press Secretary Cecely Roy said on Twitter.
