Cinder block walls and twisted pieces of metal are all that's left of the building at an automotive recycler in Collingwood after a fire last night.

Flames were first reported just before 6 p.m. yesterday, and when firefighters arrived at the fire the building was engulfed.

Terry Holt could hear small explosions inside the fire. He was there as emergency crews arrived on the scene.

“You could hear the tires popping in there and because it's an auto wrecker you know there is welding equipment in there,” he says. “Cars and traffic were going by and the first concern was propane tanks and acetylene tanks, I tried to stay back and get some pictures but I wasn't even going near it.”

Extreme wind chills and a limited water supply added to the challenge of putting out the fire.  Nearby homes were evacuated as the toxic smoke filled the sky.

“I didn't even know there was anything going on until somebody knocked on my door pretty scary,” says Collingwood resident Patrick Brown.

Residents were allowed back to their homes soon as the fire was brought under control last night but there is still a concern about the potential environmental impact of the fire because of the nature of what burned, like tires. 

Bill Murphy lives next door. He says the water that was used to put out the fire flowed around his house and onto neighboring properties. 

“It's running, you can see its running out the water, and there's got to be contaminants in the water of some kind,” he says.

Deputy Fire Chief Ross Parr says the Ministry of Environment has been notified but runoff is being limited by berms and freezing temperatures.

“With this kind of site there are berms,” he says. “We just want to make sure with the lake behind us the runoff doesn't get into the ditches and into the lake. So we are confirming that with the spills team with Collingwood public works. They are monitoring it…”

The owner of the business did not want to speak to reporters but was thankful nobody was injured.

The Ontario Fire Marshal’s office has been contacted but the fire department is handling the investigation into the cause. It's believed that the fire started in the office and storage area on the east side of the building.

Damage estimates are still being added up and could reach more than $1 million.

The fire is not being considered suspicious and the fire department has released the scene to the owner and disaster cleanup firm that will be fencing off the area while insurance adjusters take a closer look at what happened.