Trying to make sense of everything.
 

I am planning a trip to Hong Kong from Toronto in November of this year and have been saving my RBC Avion points to transfer to Asia Miles to use to book business class seats for a one way trip. Now I see that that its not likely that I will be able to book a couple of tickets using all the miles. If I book two premium economy tickets would I be able to upgrade right away to business class?

Do I understand your question correctly as "there are no Business seats available for mileage redemption, would I be able to buy Premium Economy seats and then use miles to upgrade to Business?"?

Yes, basically I have 125,000 miles as was thinking of booking one seat with miles and the other with cash but I guess there is a restriction on available seats in business.
So could I book two premium economy seats with cash and use miles to upgrade both to business or is there the same restriction?

How about the miles+cash option? You can book 2 business class tickets, use up all your miles and pay the rest with cash.

I might have to resort to that but it's much less a value.

This options is very expensive, the OP is better off buying one business class ticket and redeeming a companion award with Asia Miles.

Is there a restriction on seats available with that? Do I have to purchase the ticket first and then wait?

You can look into buying a business class ticket and requesting a companion award ticket. He's the relevant info from Cathay's website:

"

1. Companion Ticket Awards are only available for flights marketed and operated by Cathay Pacific.
2. If Members purchase a First or Business Class ticket for travel, they can also redeem a Companion Ticket. The companion must travel on the same flight, date and class of service. Companion Tickets are only available on round-trip flights.
3. Companion Ticket Awards are valid in eligible fare classes:
   • F, A (First Class)
   • J, C, D, I, P (Business Class)
4. Companion Ticket Awards are available for mixed-carrier bookings for the sectors booked on flights marketed and operated by CPA.
5. Mixed-class flight awards are not available with Companion Ticket Awards.
6. Bookings for Companion Ticket Awards can be made up to 360 days prior to departure.
7. The companion passenger need not be a Nominee in the Member’s redemption group.
8. A Member can redeem one Companion Ticket for every purchased ticket that is printed with the Member's name.
9. When making a claim for a Companion Ticket, the Member must provide all his/her travel details and ticket details of the fare paying ticket to AML.
10. Redemption tickets, prizes, group, industry/agency discounts or other discounted or free tickets cannot be used to qualify for redemption of a Companion Ticket.
11. Any restrictions and rules that apply to the purchased ticket will also apply to the Companion Ticket.
12. Companion Tickets may be cancelled, and the Asia Miles used to redeem the Companion Ticket will be refunded back to the Member making the redemption. Cancellation fee will apply for cancellations and refunds. Other service fees may apply, such fee may be changed by AML from time to time. If the purchased ticket is cancelled, member should contact Customer Care to cancel the Companion Ticket and the Asia Miles used to redeem the Companion Ticket will be refunded back to the Member making the redemption.
13. The ‘Flight Awards Redemption – General Conditions’ section and ‘Redeeming Flight Awards’ section of these Terms and Conditions apply. "

The only catch is companion awards are only available for round trip tickets.

You can only request the companion ticket after you've booked the revenue / paid ticket, you would log in to the booking and there is a spot to make the request.

The miles required for redeeming a companion ticket is lower than redeeming the usual Business Class award ticket. Have a look at the redemption charts and see what's the most economical way of doing it.