Hamilton police identified the slain teenager as Devan Selvey, a student at Sir Winston Churchill Secondary School in Hamilton, about 50 miles west of Niagara Falls.
The two 16-year-olds remain in custody as authorities investigate their involvement, Hamilton police said.
Police believe they've located the murder weapon after conducting a ground search of the homicide scene, Det. Sgt. Steve Bereziuk said in press conference.
Selvey was stabbed Monday and his mother witnessed the assault, Bereziuk had said earlier.
She was not harmed in the incident, Bereziuk said. He wouldn't comment on why the mother was in the area at the time of the stabbing.
"She's witnessed something horrible here," Bereziuk said. "She is distraught."
Bereziuk said that authorities have video of the incident.
Bereziuk said police believe there was a relationship between the suspects and the victim, although he wouldn't elaborate on what that relationship was.
"I mean, I think when I look at this so far, it's a complete disregard for human life which is extremely concerning for people of such a young age," he said.
In Tuesday's press conference, Bereziuk said he wouldn't speak to the possible relationship between the accused and the victim. He would not say bullying was involved, but confirmed it is something they continue to investigate.