The pair were detained shortly after Huawei executive Meng Wanzhou was arrested in Canada on a US warrant, in what is widely believed to have been a retaliatory move from China.
The Supreme People's Procuratorate said Friday it has begun the prosecution of ex-diplomat Michael Kovrig and businessman Michael Spavor, who were "suspected of foreign espionage" and "providing state secrets".
The move comes just weeks after a key ruling in the Meng case where a Canadian judge ruled that proceedings to extradite her to the United States will go ahead.
The United States wants Meng extradited to face trial on charges related to the Chinese telecom equipment maker's alleged violations of US sanctions against Iran.
Diplomatic relations between Canada and China have hit rock bottom over the arrests, damaging trade between the countries.
China's Embassy in Ottawa accused the United States of trying "to bring down Huawei".
China has also blocked billions of dollars' worth of Canadian agricultural exports.
The arrests of Kovrig and Spavor nine days after Meng was taken into custody have been widely decried as retribution.
While the eldest daughter of Huawei founder Ren Zhengfei has been out on bail and living in a mansion in Vancouver, the two Canadians remain in China's opaque penal system.
Monthly consular visits for Kovrig and Spavor had been suspended since the coronavirus outbreak started in China, Canadian Prime Minister Justin Trudeau said in April, amid concerns over their well-being.
China's foreign ministry has insisted the pair are in good health and that their detention facility is "in a region that is not particularly affected by COVID-19".
However, people familiar with the matter have told AFP the two have endured hours of interrogation and in the first six months of detention were forced to sleep with the lights on.
Chinese human rights lawyer Li Fangping told AFP the pair could expect their trial to be held in secret, with an official lawyer appointed.
- 'Arbitrarily detained' -
Trudeau has insisted on leaving it to the courts to decide Meng's fate.
He lamented in May that China "doesn't seem to understand" the meaning of an independent judiciary.
His foreign minister, Francois-Philippe Champagne, said after the May ruling over Meng that Canada would "continue to pursue principled engagement with China to address our bilateral differences".
Champagne also said Ottawa would continue to press for the release of Kovrig and Spavor, "who have been arbitrarily detained for over 500 days", and for clemency for a third Canadian, Robert Schellenberg, facing execution.
Meng's case now continues to a second phase, yet to be scheduled, when the defence will challenge the lawfulness of her arrest, followed by more hearings likely in September.
Any appeals could further drag it out for years.
In contrast, the trial of Kovrig and Spavor would likely happen fairly quickly, experts said.
Li said "under normal circumstances, a verdict would take six months."
Ryan Mitchell, a law professor at the Chinese University of Hong Kong, said the long period of detention was "probably intended to help coerce a 'voluntary' confession out of one or both of the two Canadians".
"These trials are thus likely to be quite rapidly dealt with, and the verdict and sentence already determined by the (Communist) Party officials overseeing the management of the cases," he said.