Hwy 17 from Sault Ste. Marie to Espanola will be fine, but I would definitely not ride around the north side of Georgian Bay. Hwy 69 is not bike friendly, and it is being converted piece by piece to 4 lane contolled access highway.Rather, I would turn south on HWY 6 at Espanola and ride accross Manitoulin Island. At the southern end of the island, there is a ferry that takes you to Tobermory where Hwy 6 resumes. I've ridden accross the island, and on Hwy 6, and it's a nice ride.
From there, take your pick of any of the secondary highways to get you to Lake Ontario and the Waterfront Trail.