The federal government is backing a made-in-Alberta artificial intelligence drone product that aims to replace wasteful weather balloons and protect Canadian airspace.

Landing Zones Canada, based in Medicine Hat, Alta., is receiving a $1.1-million loan from Prairies Economic Development Canada to help further develop and bring the drones to market.

“This is basically a very expensive boomerang,” said CEO and founder Spencer Fraser during a Monday news conference, pointing to several of the metre-long remotely-piloted aircraft systems.

“It’s going to go up on a balloon, do all of its sensing and come back.”

The GITPO drones offer an environmentally-friendly alternative to the traditional single-use weather balloons that abandon a shoebox-sized sensor package called a radiosonde after recording information.

WATCH | Here’s how the reusable weather sampling drones work:

The 20,000 radiosondes launched each year by the federal government are considered crucial for weather forecasting but leave electronic waste across the country.

The drones developed by Landing Zones Canada ride a balloon thousands of metres into the air, gather data and then fly to a designated location using AI — and can be used hundreds of times.

The company’s goal now is to scale up, increase production and sell domestically and internationally. Fraser, the CEO, said a pilot project with the Canadian government is in the works, too.

The unmanned aerial systems also have defense applications.

The drones from Medicine Hat can be used to test Canada’s $6-billion Advanced Arctic Over-the-Horizon Radar project, according to Fraser.

“You can simulate everything but at the end of the day, you gotta get up there and say, ‘does it work?’”

Eleanor Olszewski, the federal minister responsible for Prairies Economic Development Canada, said the Liberal government is backing the responsible use of AI by businesses.

“Our federal government is focused on using AI to build a more resilient economy … that actually contributes to our sovereignty as well,” Olszewski said.

It’s also a crucial investment in domestic suppliers that’s in line with a new national defense industrial strategy revealed by Prime Minister Mark Carney last month.

“It’s an imperative at this point in time — not only because of issues of global instability which we’re seeing each and every day and have for some time now — but also in an effort to direct more resources towards protecting our national sovereignty,” the minister said.

“Strengthening relationships between government and industry is important. And, of course, the job creation aspect as well.”

Medicine Hat’s mayor said she was excited by an opportunity to continue diversifying a local economy historically fuelled by oil and gas.

“Announcements like this put Medicine Hat on the radar of the employees that companies like Landing Zones need,” Linnsie Clark said.

“So not just attracting the industry itself but attracting the skill and talent that we are going to need in this space.”

Olszewski wasn’t able to confirm if the repayable investment in Landing Zones Canada would count towards Ottawa’s pledge to spend five per cent of the country’s GDP on defense by 2035.

But, she added, the federal government is trying to find as many “dual-use” scenarios like Monday’s announcement to meet the military spending target.

As Medicine Hat and southern Alberta at-large looks to stake its claim as a major player in the drone industry, Olszewski didn’t rule out returning to the region with more federal cash.

“Regions like southeastern Alberta, but also other regions in the Prairies, can feed into and form part of the defense supply chain,” she told CBC News.

“And that will certainly strengthen regions like southern Alberta in terms of economic capability.”