Ambulance New Brunswick said the crash occurred at about 5 a.m. as the Atlantic Charters aircraft returned to the island off the province's southwest coast after flying a patient to the Saint John Regional Hospital.
The ambulance service identified William Mallock, of Grand Manan, as the paramedic killed in the crash, adding he had over two decades in the service.
"William, or Billy as he was known by his friends, and the pilot lost their lives serving the public and helping patients," said Paul Ward, the interim CEO of Ambulance New Brunswick.
Atlantic Charters did not confirm the identity of the pilot.
The air ambulance service says another pilot and a registered nurse survived the crash. A spokesman for the Horizon Health Network said in an email that both were in stable condition and receiving treatment at the Saint John Regional Hospital on Saturday evening.
Dale Parker, the assistant fire chief in Grand Manan, said it was difficult for first responders who arrived at the crash scene to witness the injuries of their fellow emergency workers.
"It's very tough," he said in a telephone interview.
"It's awful to rescue the rescuer ... This touches our rescue team. We're a tight family when it comes to the ambulance, the fire department and the hospital."
He described the dead pilot as a widely admired figure on the island who cared deeply about his job transporting people to hospital for treatments.
"He was just in this for the island," he said of his friend.
Dennis Greene, the mayor of the village of Grand Manan, said he'd also been to the crash site and seen the damaged aircraft.
He said many residents of the small, tight-knit Bay of Fundy community — which has a population of under 2,500 people — have either been airlifted themselves or have friends and family who've used the service.
"It's a very tragic event for the island. Atlantic Charters is providing a great service to Grand Manan. They have saved a lot of lives and the island is in shock," he said in a telephone interview.
Tania Johnson, a 32-year-old Grand Manan resident who lives near the airport, said she had taken a flight on the plane when her infant son had to be checked for meningitis.
"Everybody on Grand Manan knows these guys," she said. "It's absolutely devastating to Grand Manan."
Johnson said the service is often critical to the seriously ill or badly injured because they aren't capable of taking the ferry ride to the mainland.
Ward said in an online statement that it's too early to say what caused the crash.
"We extend our deepest condolences to the families, friends and colleagues of our Ambulance New Brunswick paramedic and the pilot from Atlantic Charters who lost their lives," he said.
He also said the air ambulance service will continue to be provided.
In a statement on their website, the Transportation Safety Board of Canada says it is sending a team of investigators to Grand Manan to gather information and assess the crash.
The statement says the plane involved was a Piper PA-31.
Ambulance New Brunswick is the organization licensed by the New Brunswick Health Department to provide land and air ambulance services in the province.
— By Michael Tutton in Halifax
follow @mtuttoncporg on twitter.