He told them: "The thousands of you gathered here are proof that today's generation of young people is the most connected, most energised, and most confident the planet has ever known.
"You know that differences of opinion, of circumstance, of race and religion - are to be respected and celebrated.
"You know that in a clickbait culture, we cannot waste time sharing and drawing attention to things that make us angry, or that we know to be false.
"You all know that it's great to 'like' things on social media, but that it's more important to look up from our phones, to get out into our communities, and to take real action; to stand up for what you believe in."
To laughter, he added: "Sadly, I'm now part of a slightly older generation! But in the years to come I want to work with you to help encourage, identify and support the new generation of leadership, both local and global leaders."
The Prince also spoke on the importance of saving the environment, a cause championed by his brother the Duke of Cambridge and father the Prince of Wales.
As young people nodded and cheered, Harry said: "In today's world too many people feel cynical and apathetic.
"I get that the challenges we face sometimes seem complex and even scary, especially when we don't know who to turn to for answers.
"I know that while this generation of young people wants to make our world a better place, you often struggle to get your voices heard.
"I know that you, more than any previous generation, care deeply about the health and sustainability of the planet you're going to inherit.
"And I see that you're frustrated, that entrenched mindsets are not keeping pace with the urgency of the threats to our environment.
"But today you are all saying no to pessimism and cynicism. Here in Toronto - with both WE day and the Invictus Games - we are saying yes to optimism, yes to hope, and yes to belief.
"And we are putting service and giving back at the heart of everything that we do."
WE Day is a series of events intended to bring young people together to inspire them to work for the social good.