A 24-year-old homeless man has been charged after allegedly slashing a toddler in the face while he held him in the basement of a Vancouver community centre overnight.

Kyle Hepworth Jackson is charged with taking of a hostage, aggravated assault, unlawful confinement, assault with a weapon and possession of a dangerous weapon.

Vancouver police say the three-year-old boy is back at home with his family after undergoing surgery for a five-inch laceration to his left cheek from a large kitchen knife.

The incident started just after 6 p.m. Tuesday, when police say Jackson burst into the centre yelling and brandishing a large knife.

Majid Alemi Jr. told CTV News said he called the police after seeing the armed man carrying the little boy, and the mother crying.

"He came from the back door and entered. He suddenly grabbed the boy. He was shouting hard and the kid was crying hard too," he said.

Police say Jackson ran downstairs with the boy and barricaded himself into a small washroom.

A team of Vancouver police investigators negotiated with the man for hours until they learned the child had been harmed.

"When the man's mental state began to deteriorate, that's when he cut him … and that's when our officers immediately had to decide to burst in to rescue this boy from possible further injury," Const. Lindsey Houghton told reporters.

A VPD Emergency Response Team stormed the washroom and rescued the youngster, who was rushed to hospital for treatment.

Houghton called the rescue effort "somewhat of a dog pile."

"They had to disarm him of the knife, they had to remove the child all in an enclosed space," he said.

Houghton said the boy was "probably one of the bravest young kids that any of us have ever met, especially in these circumstances. We cannot imagine what this family has gone through."

Police commended the boy for remaining quiet and calm through his terrifying ordeal.

"When the incident came to its climax the kid didn't cry, he didn't make a sound, he didn't scream. The kid was absolutely amazing," he said. "We cannot imagine what this family has gone through. They are heroes to us."

Jackson was taken into custody and was treated for a cut to his mouth.

Questions

Meanwhile, Vancouver Mayor Gregor Robertson said the incident raises questions about why a man with a history of mental health issues and violence was out on the street.

Robertson said Vancouver police issued a report in 2008 about the burden mental health issues place on resources, along with solutions such as an urgent care centre to treat people.

"The City's public facilities like libraries and community centres provide safe, warm places for people to come inside during the cold weather. But let's be clear -- they are not equipped to handle people with serious mental illnesses.

Robertson said city officials will be discussing the matter with the provincial government.

He too praised the boy for keeping a cool head during the ordeal, saying "His parents should be very proud of him. He showed a level of courage and calm well beyond his years."

Parents running scared

Rowena Dacanny, who takes her three kids to Ray-Cam, said the incident has left her rattled.

"It's kind of scary to bring my kids here now," she said. "I told them what happened so they are aware but things like this … my kids were scared today."

Parent Emma Horn said her two 10-year-olds have been "traumatized" by the hostage taking. She said she planned to try and explain the situation to them to make sure they felt safe coming back this morning.

Horn said the community centre is an open space where staff tries to welcome everyone in the notoriously impoverished neighbourhood, no matter what their personal circumstance.

"There is not much security here but the staff do what they can, you know? People with mental health issues are not predictable."

Horn described the suspect as quiet. She said she'd seen Jackson – who she called ‘Hep' -- several times at a local church mission in the Downtown Eastside where she takes her children for free meals.

"It's kind of concerning, too. I have to re-evaluate that, too now," she said. "This is everyone's worst nightmare."