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Ontario Finance Minister Dwight DuncanMoe Doiron/The Globe and Mail

Ontario Finance Minister Dwight Duncan is trying to make amends with Alberta, telling business leaders his government supports development in the oil sands despite previously saying the hot energy industry hurts manufacturing in eastern Canada.

His comments, which drew applause at a Calgary luncheon Thursday, backtrack on statements made by Ontario Premier Dalton McGuinty in February. Mr. McGuinty said the west's oil boom has propelled the Canadian dollar to heights harmful to his province's manufacturing sector, an effect sometimes called the Dutch disease. Mr. McGuinty said he would rather have a weaker dollar to the benefit of Ontario than a growing energy industry in the west. He called the loonie a "petro-dollar."

Mr. Duncan, however, unequivocally backed the oil sands industry.

"It is the hope of our government that we can support you in your aspirations. We will support to continue positive development of the oil sands," he said. "We're proud of our sister province, Alberta. We will work with you to develop those oil sands to allow the prosperity that you're experiencing today to continue to flourish. Because a strong Alberta means a strong Ontario and that means a strong Canada for all of us."

The oil sands divisiveness is threatening to slow growth in northern Alberta as projects such as the proposed Northern Gateway pipeline, which would expand Canada's export markets to Asia, face staunch opposition. Federal NDP Leader Thomas Mulcair has been critical of the oil sands.

Mr. Duncan said he was "astounded" to learn the oil sands industry will buy around $63-billion of goods and services from companies in Ontario over the next 25 years. Business from the oil sands could surpass "most" of Ontario's traditional export markets, he said. Further, 7 per cent of the total jobs related to the oil sands will be in Ontario, he said. (The minister did not cite any sources.)

"Thank you, Alberta," Mr. Duncan said. "And let me say this: Mr. Mulcair does not represent the view of central Canada on the oil sands."

Mr. Duncan also said he supports Enbridge Inc.'s proposed Gateway pipeline, a controversial piece of infrastructure that will cut through Alberta and British Columbia on its way to tidewater at Kitimat, B.C.

Mr. Duncan told reporters after the luncheon that Mr. McGuinty's earlier comments expressed Ontario's "very real frustration and challenges" the rising Canadian dollar has created. "But we need to also recognize the important economic benefit to Ontario that has arisen from that, and to Canada. And a strong Alberta, a strong western economy, a strong energy economy, makes for a stronger Canada."

He added: "In spite of the higher dollar and the challenges that poses for Ontario, the oil sands and the development of the oil sands also present huge opportunity. And we wanted to make sure that the people of Alberta know that we understand that, and we're very committed to working with Albertans for Alberta to realize the potential."

Mr. Duncan said many folks in his province do not understand the oil sands, and that while the manufacturing sector has been hit hard, the oil sands could fill the void.

"Some, like Mr. Mulcair, tend to demonize something like this because of the hurt that is going on in the manufacturing sector," he said. "But many of those people are going to find jobs in sectors related to the oil sands. And I think if we come to terms with that and realize that, instead of bemoaning what's happened, we will embrace it."