In the spring of 1943, number 116 Squadron (RCAF) moved to the Sea Plane Base at Botwood Nfld, and started anti submarine, and convoy escort operations with its Canso amphibious aircraft.

By late fall, with the threat of ice forming in the harbour, the Squadron received orders to move to its winter station at Gander and commenced moving on 15 Nov. By the 18th all of its aircraft, personnel and essential equipment had been moved and the squadron was able to resume operational flights from Gander.

On the night of 8 Dec, F/L Rae and his co-pilot, F/O Owen were engaged in night flying training in Canso 8033. After three uneventful take-off and landing's, Rae turned the controls over to Owen, who took off, made a circuit of the airport and began a standard approach. The aircraft touched down, about one third of the way down the runway and Owens received permission from the Tower to make a 180 degree turn and return to the end of the runway for another take-off.

By this time their speed had dropped to about 25 mph and with the end of the runway was coming up, Owen applied the brakes before starting the turn but found he had no braking action. Rae also had tried to brake, unsuccessfully, and then, he attempted to turn the aircraft by gunning the starboard engine. The aircraft only swung about 90, instead of 180 degrees before running into a deep ditch at the side of the runway at about 30 mph. The force of the impact was so great as to crush the cockpit and leave the aircraft in a 45 degree nose down angle.

All six members of the crew received various minor injuries but Rae and Owen were in critical condition. The two wounded airmen were taken to the Gander Hospital where Rae's died several hours after the crash. Owen's injuries were serious but he survived.

Rae was buried in the Gander cemetery on 11^th December with full military honors. The Commonwealth War Graves Commission lists him as follows:
 

RAE, Flt. Lieut. Hugh Mackay, C/1361. R.C.A.F. 8^th December, 1943. Age 28 Son of Warren Hugh and Christina Rae, of Southburn, Nova Scotia; husband of Lorna M. Rae, of Saskatoon, Saskatchewan. Plot 1. Row 2. Grave 12.