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Oh! Canada May Beat U.S. to Commercial Drone Delivery

October 9, 2017, 8:54 PM UTC

Our neighbors to the north may get commercial drone flights before the U.S. does.

Drone Delivery Canada says it has received the regulatory approvals to test commercial drone delivery service in northern Canada within the next four weeks. The drones will be used in Moose Cree First Nation, an indigenous community, about 440 miles north of Toronto, company CEO Tony Di Benedetto tells Fortune.

“Up there, there are no roads, so moving around is complicated and expensive,” Di Benedetto says. “There are two communities separated by a river and to move between them, you can spend a lot of money on a water taxi, which is literally a raft.”

Transporting mail and supplies is time consuming and added time means added cost. A container of detergent can go for $30 to $40 while milk and other perishables cost double what they do in more urban areas, according to The Toronto Star.

In the winter, the locals use frozen rivers to travel, but global warming has made that risky. Helicopter service is another option, but costs $1,800 an hour.

Related: New Senate Drone Bill Would Give Power to the States

To address this transport problem, Di Benedetto hopes to build “a railway in the sky” using drones that can be controlled and recharged from stations at each end of the route. Over the last three years, DDC has worked with researchers from the Universities of Toronto and Waterloo on technology it says will enable fully autonomous flights that can operate beyond line-of-sight by ground personnel.

In the U.S.and many jurisdictions, rules require that drones remain in view, or the line of sight of a ground-based operator. DDC is the first Canadian company to demonstrate in test flights for Transport Canada—Canada’s FAA equivalent—the ability to fly drones beyond line-of-sight, Di Benedetto says.

Related: Where Are All the Commercial Drones?

Initially, DDC plans to test a small unmanned aerial vehicle with a 50-mile range that can carry just under 10 lbs of cargo before increasing the range and capacity. The biggest drone his company is considering using can carry about 3,300 lbs and fly up to 15 hours, Di Benedetto said.

DDC has attracted U.S. companies that want to use its system. Last year, office supply chain Staples signed up to explore using DDC drones in Canada, for example.

Retail giant Amazon (AMZN) has long signaled its interest in delivery drones. Di Benedetto says DDC can help other retailers do what Amazon can. Amazon would like to use drones to deliver purchases from its online store to their buyers, even in populated areas. Flying drones over urban areas is a concern of the FAA.

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DDC’s system can control drones that fly as high as 40,000 feet, although the delivery drones will probably stay between 500 to 1,500 feet high, Di Benedetto said.

U.S. regulations on commercial drone use are still under development. Currently in the U.S., rules prohibit commercial drones from flying beyond line of sight or over populated areas, for example. Last year, the FAA established several test centers to put UAVs through their paces. But, there is no timeline for commercial drone use in the U.S., said Gretchen West, senior advisor with Hogan Lovells, a law firm that works with the drone industry. Transport Canada, on the other hand, is working closely with commercial drone companies to enable expanded use of drones in certain circumstances, she said.

There have been limited drone delivery tests in the U.S. in controlled settings. Amazon (AMZN) for example showed a small drone dropping a package of sunscreen at a tech event last summer. What is being proposed here is much broader use albeit over less populated areas.