The earliest record of Toronto's Chinese community is traced to Sam Ching, who owned a hand laundry business on Adelaide Street in 1878.

[6] The 1909 Toronto city directory showed them as two distinct clusters of Chinese shops located at: When the Qing dynasty fell in 1912 the reform association became defunct and the business next to it move away from the Queen Street East neighbourhood.

As in the rest of Canada and the US, due to entry resistance into other areas of employment, the Chinese of Toronto had to resort to the labor of food service and washing laundry.

[8] In this time, hundreds of Chinese-owned businesses had developed, consisting mainly of restaurants, grocery stores, and hand laundries.

[10][9] The Toronto Police regularly raided Chinese restaurants for alleged alcohol and gambling offenses, particularly after the passage of the Canada Temperance Act in 1916.

Like the rest of the country, Chinatown suffered a severe downturn in the Great Depression, with the closing of more than 116 hand laundries and hundreds of other businesses.

Both establishments catered to a largely western clientele with the Lichee Garden being able to accommodate 1,500 customers a day and offering dining and dancing with a live band and a closing time of 5 a.m.[10] Other large restaurants such as the Kwong Chow, the Golden Dragon, and Sai Woo opened in the 1950s with millions of dollars being spent by Chinese investors on improvements to Elizabeth Street.

[10] Regardless of the investment by its owners and the success of the area with customers, plans emerged in the late 1950s to construct the new Toronto City Hall at the northwestern corner of the intersection of Queen and Bay Streets, it became clear that most of Chinatown would be displaced by the project.