Officers were called after staff at the Sea to Sky Gondola in Squamish, British Colombia, arrived at work on Saturday and found several cars on the ground.
The Royal Canadian Mounted Police have said they have not ruled out foul play and are working with experts to find out if the 55mm cable was sabotaged.
No one was hurt in the incident which appears to have occurred overnight when the ride, which carries passengers to a spot overlooking Howe Sound, was closed.
Police spokesperson Ashley MacKay said: "We recognise the potential of what could have been and are thankful that no one was injured.
"We are currently assessing the damage but our preliminary assessment suggests that a cable was cut. We will continue our investigation and release updates to you as soon as possible."
The gondola operator released a statement on its website saying it was "closed for the foreseeable future due to a major lift incident".
It said in a statement: "At approximately 4.30am on Saturday 10 August 2019, we received an alert that the haul rope for Sea to Sky Gondola had fallen and the lift was inoperable. The gondola is currently closed."
CBC said the damage was estimated at more than C$1m (£634,000).
The Sea to Sky Gondola ride involves being carried from just above sea level to an altitude of 885m (2,900ft) in 10 minutes, where there are a number of viewing platforms and gorge bridges leading to hiking trails.
The 2km cable normally carries up to 240 passengers in 30 cars and is a major tourist destination.
The Canadian broadcaster published pictures that showed many of the gondolas lying on the ground, on a slope, tens of metres below where they should have been.
Squamish is a small town on the route between Vancouver and the well known ski resort of Whistler.