Kam McLeod, 19, and Bryer Schmegelsky, 18, were last seen near the remote community of Gillam, Manitoba province.
Police have focused their “exhaustive” manhunt around there for over a week, but have found no trace of the pair.
Now they say there will be a “phased withdrawal” of resources in the area in the coming days.
Military air assistance will also no longer continue.
“I know that today’s news is not what the victims’ families and the people of northern Manitoba wanted to hear, however this is always a possibility when searching in vast, remote and rugged areas with terrain that is difficult,” said Manitoba Royal Canadian Mounted Police assistant commissioner Jane MacLatchy on Wednesday.
But she added that the manhunt for the two young men was not over, and some “specialised and tactical resources” would remain in Gillam.
Searchers have covered some 11,000sq km (4,250 square miles) of land by air or foot since 23 July.
The last confirmed sighting of Mr McLeod and Mr Schmegelsky was over a week ago, and a burnt-out vehicle they had been driving was found 40km (25 miles) from Gillam.