Police say the incident happened on Tuesday around 7 p.m. in downtown Victoria in the 1200-block of Government Street, where multiple people reported the suspect.
Officers say they confronted the man, who ignored police orders and pulled the hatchet from his jacket.
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Police say they shot him in the thigh with a bean-bag gun before arresting him.
They say he was uninjured but was taken to hospital for medical clearance before being released with conditions.
Police say no additional details on the investigation can be released, as the matter is now before the legal system.
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