Speaking to the Toronto Board of Trade, Prentice spoke to the real and significant challenges facing Ontario, and the need for governments to make smart choices to help promote the development of the province's manufacturing sector.
"The province's traditional economic foundation has eroded, significantly influenced by global forces that define the modern world. There is no simple solution; no easy tonic. But there are steps that can be taken, potential that can be pursued and strengths that can be further developed."
Prentice identified three things he thinks are necessary to address the challenges facing the sector. Number one, he believes that there is a need to recognize and build on existing strengths.
"Among Ontario's primary strengths is Toronto's role as Canada's business and financial capital. Toronto is well-positioned to benefit from the growth of emerging nations, and from their demand for resources."
He noted that to meet the growing needs of Asia, more mines will need to be built and more energy harnessed. These projects will require huge amounts of capital from around the world "that will need to be channeled through a credible source - preferably one with an unparalleled expertise in resources and a rich history of financing such projects.
"Who better than Canada's banks to raise and marshal the capital required? Who on earth has more ingrained, generational know-how about mining, about energy, about the resources that will help shape the future?"
Secondly, he believes Ontario cannot give up on having a strong manufacturing sector, but that its future lies in the ability to refocus its manufacturing base towards high-value opportunities.
"In response to domestic and external demand, you will find no other G8 country - in fact no other country in the world - that is bringing on infrastructure projects at the pace and relative scale of Canada," said Prentice. "Close to $290 billion of investments [are] to be built in Canada over the coming years.
"Where better to build the high-value components required than right here in Ontario? Who is better able to manufacture the steam generators, the turbines and the electronics than workers in this province?"
He noted that outside of Alberta, Ontario already benefits more than any other province from oil sands production. It is estimated that during the next 25 years, Alberta-based energy companies will buy $55 billion worth of goods and services from Ontario. For every dollar currently spent in Alberta on the oil sands, the economic benefit to Ontario is 31 cents.
"The oil sands stand as one of the engines of domestic economic growth in our country - with at least $20 billion of annual investment planned for this year, next year and every year over the foreseeable future. Alberta alone doesn't have the industrial capacity to keep up with demand for manufacturing. Every single CEO in Canada's energy industry will tell you that and will emphasize that sourcing new manufacturing capacity is their greatest single challenge.
"And it's not just the oil sands. Canada has what the world wants - potash, oil, natural gas, uranium, copper, iron and nickel. We have no interest in being mere drawers of water and hewers of wood. We can and we should strive to be the very best at producing value-added services across the energy and resource sectors."
In order to achieve and sustain this transition, Prentice believes governments have a key role to play. This includes establishing a well-articulated national industrial policy. He is calling on Canada and the provinces to jointly develop an educational and training system that will better provide our manufacturing and resource sectors with the skilled resources they require. It also includes a bigger and better commitment to science and technology.
"Governments have levers - they should use them," said Prentice. "Governments also need to understand that although a low-tax environment is essential, smart fiscal policy is no longer in itself sufficient to ensure a competitive advantage. Tax policy can be gamed by any and all jurisdictions. Others, including the U.S., are catching up to us. We therefore need a longer term, more integrated approach to encouraging domestic investment in Canada.
"We need a skilled workforce, investments in urban and cultural infrastructure, and institutions that encourage innovation that will help Ontario and Canada stand out as attractive destinations for investment and job creation."
He also called on Canadian governments to become more active in global business.
"The reality is that governments in other countries play an active and often direct role in developing economic activity and influencing its performance in the marketplace. Look around and it's not hard to see the impact of State Owned Enterprises, sovereign wealth funds and good old-fashioned, often imprudent, government intervention. To prosper in the global marketplace, Canada needs to fight to win.
"Today, Canada stands on the verge of a new period of growth and development - a period that holds the potential for sustained prosperity as we develop our resources, diversify our markets, rebuild our manufacturing base and look to exciting new opportunities. We must always remember that our country remains a work in progress. The job of continuing to build Canada is our task and our trust."