But the federal agency will continue to consider a series of other plans for area, including tent cabins and an expanded program of boat tours.
"Today's decision reflects our pledge to ensure our protected natural and cultural heritage remain unimpaired for future generations while facilitating ways for people to meaningfully connect with and learn about nature," said Jasper National Park superintendent Greg Fenton.
Maligne Lake is the world's second-largest glacier-fed lake, its 22-kilometre length ringed with spectacular, 3,000-metre peaks. A view of the lake's Spirit Island was featured on the old $5 bill.
Parks Canada's decision was in response to a 2012 series of proposals from Maligne Tours, which has offered commercial services at the lake for decades including boat excursions, a cafeteria and a store.
The company proposed a high-end, 66-room hotel and 15 tent cabins. It also seeks to restore a historic boathouse, add a restaurant and lounge and offer interpretive activities. Maligne Tours says those attractions would increase the lake's appeal to urban youth and to new Canadians, two groups Parks Canada is keen to reach.
The upgrades would also bolster the company's bottom line. It says demand for boat tours has fallen by about half since 2005.
Many of the proposals have been controversial in the town of Jasper. Protesters have sometimes stationed themselves along the tight, winding road up to the lake to bring them to the attention of the up to 2,000 tourists a day who visit in high season.
In April, three former senior Parks Canada staff also opposed the hotel, saying overnight accommodation would create too much disturbance to area wildlife, which include threatened and endangered species such as grizzly bears, harlequin ducks, and mountain caribou.
Parks Canada will now give the company's 13 other proposals for its business at the lake a more detailed review.
The Alberta Wilderness Association praised the agency's decision on the hotel.
"It is reassuring to see that Parks Canada has listened to Canadians who have clearly said they do not support large-scale developments in critical wildlife habitat,” said conservation specialist Sean Nichols. "The prevailing theme in the feedback received by Parks Canada from the public was opposition to overnight accommodations."
But he said the group still has concerns that consideration of the tent cabins and expanded commercial facilities will continue.
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