Police say they have uncovered hundreds of stolen cars and vehicle parts in a scrap yard north of Montreal, in what may be the biggest car-theft operation in Canadian history.

"It is probably the biggest seizure of stolen cars from a recycling business in Canada," Laval police spokesperson Nathalie Lorrain told CTV Montreal.

The investigation began during a routine patrol of the area, located in Duvernay, Laval. Officers said they spotted suspicious activity and did a spot check, turning up three stolen vehicle identification numbers.

Police then obtained a warrant to search the entire 100,000 square-foot-scrap yard.

Early estimates suggest more than 700 stolen cars, including luxury vehicles. But police will only have an exact number after a thorough search of the yard, which could take a week.

"Some of the cars here were brand new, probably out of either a lot or wholesaler and with no mileage," said Lorrain.

"Some of them had more mileage. But there were a lot of luxury SUVs, a lot of cars like Mercedes, Jaguars, you name it. They're all here."

Other cars were stacked on top of one another, while police believe some cars had already been dismantled. Parts like airbags and engines were found throughout the yard.

The business has been operating for several years, buying and selling used and damaged cars, along with car parts.

Police have arrested the 39-year-old owner and one employee on charges of possession of stolen goods.

The owner appeared in court Wednesday afternoon and will remain in jail until a bail hearing, scheduled for Friday.

Car theft is a huge business in Canada. In 2005, about 160,000 cars were stolen across the country, costing more than $1 billion in insurance claims and law enforcement.

Stolen cars also cost human lives.

In a period from 1999 to 2001, drivers of stolen vehicles killed 81 people and seriously injured another 130.

And just four days ago, a five-year-old girl suffered head injuries when she was hit by a stolen car. Three 15-year-old boys have been charged.

With a report from CTV's Jed Kahane, Herb Luft and files from The Canadian Press