The report comes after more than a year of hearings in B.C. and Alberta, and hinges on 209 required conditions, including developing a marine mammal protection plan, researching heavy oil cleanup and conducting emergency response exercises.
The controversial $7.9-billion pipeline, which would take bitumen from Alberta's oilsands to the B.C. coast for tanker export to Asia, has pitted Calgary-based Enbridge against environmental groups and several First Nations.
During the review process, the panel heard from over 1,450 participants in 21 different communities, reviewed over 175,000 pages of evidence and received 9,000 letters of comment, according to Joe Oliver, Canada's minister of natural resources.
In a statement, Oliver said the panel's report "represents "a rigorous, open and comprehensive science-based assessment."
"Now that we have received the report, we will thoroughly review it, consult with affected aboriginal groups and then make our decision. We also encourage everyone with an interest to take the time and review the report," he said.
"Our government will continue to improve the safe transportation of energy products across Canada. No project will be approved unless it is safe for Canadians and safe for the environment."
B.C. First Nations defiant
On Thursday, First Nations groups in British Columbia expressed both disappointment and defiance.
"One spill in the Great Bear Rainforest wipes out our food supply, our economy, our culture and everything that we stand for," said Coastal First Nations executive director Art Sterritt.
"And we will never allow that [to] happen, nor would the Constitution of Canada."
Grand Chief Stewart Phillip, president of the Union of B.C. Indian Chiefs, said the fight was not over.
"This is about the environmental integrity of the watersheds we all share and we are willing to go to any lengths to defend our watersheds," he said.
"We are prepared to go to the wall against this project. We have no choice."
In the lead-up to the panel's decision, more than 130 aboriginal bands signed a declaration against the project.
Conservation groups called the pipeline a major setback for science and democracy in Canada.
"We submitted hundreds of pages of scientific evidence on behalf of our clients that lead to one emphatic conclusion: The Northern Gateway pipeline is an unsafe, unsustainable and unnecessary project, and it does not serve the national interest of this country,” said Ecojustice staff lawyer Barry Robinson.
"While we are deeply disappointed with the JRP’s recommendation, this does not mean the pipeline is approved or will even be built."
Gwen Barlee, of the Wilderness Committee, said the panel's decision puts the environment at great risk.
"We have a federal government that has for the past two years … gutted environmental legislation," he told CBC News. "This is a thoughtless decision, this is a foolish decision … and it's a very, very disappointing recommendation."
B.C. 'open for businesses'
But some stakeholders in B.C. had a different reaction Thursday, celebrating the long-awaited announcement.
In a statement, the B.C. Chamber of Commerce said the project's approval was an indicator that "while our standards are rigorous, B.C. is open for business."
"This is great news for B.C.," said John Winter, president and CEO of the B.C. Chamber of Commerce.
"With this decision, British Columbians can confidently back this project, knowing that it meets our top-tier environmental and community standards."
John Gamble, president of the Association of Consulting Engineering Companies, agreed.
“Oil and gas will continue to be part of the Canadian economy for some time and we need to get our oil and gas resources to market,” Gamble said in a statement.
“We need to diversify energy exports away from the United States and towards more rapidly growing economies."
B.C. sticks to 5 conditions
During the review process, the B.C. government told the panel it did not support the pipeline as proposed, and on Thursday, B.C.'s Minister of Environment Mary Polak said she could not see the project succeed unless the five requirements previously laid out by the province were met.
"I wouldn't say we're happy with the panel report. I would say we're encouraged that the panel now joins Alberta and joins the federal government and Enbridge in recognizing that the environmental debate around the pipeline is the debate that needs to be resolved," she told CBC News.
"The five conditions have set the bar ... I think we've established the position that that's the minimum and if you don't get there, the project is not going to be successful."
The final decision still rests with the federal government, which has 180 days to respond to the panel's report.