HALIFAX -- Oil and gas exploration and bottom-trawling fishing should be prohibited in the marine protected areas off Canada's coasts, a federal advisory panel says.

In a final report released Tuesday, the panel says Ottawa should adopt standards developed by the International Union for the Conservation of Nature, which prohibits industrial activities in marine protected areas.

"There is an increased potential for protected areas overlapping with areas that have economic potential," the report states.

"Clear guidelines about the activities allowed and prohibited in protected areas can help to curtail the conflicts we see emerging from these overlaps."

The report also calls for First Nations to become fully integrated in the development of marine protected areas, saying "Indigenous protected areas" should be recognized in law and provided with long-term funding.

The panel said Indigenous protected areas will play an important role in advancing Canada's marine conservation objectives and would count toward the stated goal of protecting 10 per cent of ocean and coastal waters by 2020.

"By appropriately recognizing Indigenous Protected Areas, Canada has a unique opportunity to uphold and support Indigenous peoples in a transformative way. None of Canada's MPA legislation explicitly limits the opportunity for Canada to establish Indigenous Protected Areas with Indigenous peoples."

The panel also said it recognizes that socioeconomic needs must be considered as marine protected areas are developed, and it points to concerns raised by the premiers of Nova Scotia and Newfoundland and Labrador.

Last May, Newfoundland and Labrador Premier Dwight Ball told the panel that confusion between existing marine refuge zones and potential marine protected areas had "stranded investment" for offshore oil activity.

"We don't need to shut down the economy to be good stewards of our oceans," he said.

Nova Scotia Premier Stephen McNeil told the panel that environmental protections should be balanced with economic factors.

The panel said that can be done.

"We believe that Canada's approach to marine conservation should include highly protected MPAs that have a consistent national standard of protection, complemented by other management tools that can offer flexible approaches to combining effective biodiversity protection with economic development," the panel said.

As a result, the panel recommended that in protected areas where industrial activities are allowed, the minister of Fisheries and Oceans and the Canadian Coast Guard must be satisfied through legislation or regulation that the risks to biodiversity are "avoided or mitigated."

Environmental groups were generally receptive to the recommendations, especially when it comes to limiting oil and gas exploration.

"We were certainly very happy with the clear statement that industrial scale activities ... have no place in the Oceans Act and marine protected areas," said Jordy Thomson, marine science co-ordinator for the Halifax-based Ecology Action Centre.

However, Thomson said he was concerned there wasn't a clear statement about activities allowed in areas that aren't protected by the Oceans Act, such as marine reserves.

"That's a concern because a lot of those protected areas were established to protect sensitive habitats like corrals and sponge beds and the science tells us that those species in particular are really vulnerable to oil and gas potential impacts," he said.

Louie Porta, vice-president of Oceans North, said it would be "strong step forward" if Ottawa adopted the recommendations.

He said that was especially true of the recommendations regarding Indigenous Peoples.

"That stands out the strongest to me of the things that are contained within the report and are not what you might have imagined when you looked at their mandate."

However, Porta also has questions about the panel's decision not to recommend a prohibition of oil and gas activities in marine refuges and areas closed to fisheries.

He said there is plenty of room left for industry without further encroaching on areas with sensitive ecologies.

"This panel is trying to help us meaningfully protect 10 per cent of our ocean environment, which effectively means it's allowing 90 per cent of our oceans to be open for business," said Porta. "I think that's a reasonable balance when it comes to looking after industrial and economic interests."

In an emailed statement, Federal Fisheries Minister Jonathan Wilkinson said the government would review the recommendations.

"Marine protection plays an important role in making our oceans cleaner and healthier," said Wilkinson. "Unlike the Harper Conservatives, our government is actively engaging with our partners in the provinces and territories, with Indigenous communities, marine industries and Canadians from coast to coast to coast to increase protections and meet our targets while supporting a healthy oceans economy."