A study tested several possible explanations of why the reading literacy levels in Newfoundland and Labrador (Canada) are lower than those in the rest of Canada. Reading literacy was chosen as the focus of analysis for three reasons: (1) the reading score was the most consistent of the three direct measures of literacy; (2) the reading and numeracy scores were very highly correlated; and (3) the writing scores showed the lowest consistency of the three measures. Data on 4,030 native speakers of English (ages 16 to 69 years) born in Canada were taken from a large set of statistics gathered by Statistics Canada in October 1989, on behalf of the National Literacy Secretariat, to test for the following factors: the "brain drain," age, rurality, educational attainment, and parents' education. Results indicated that: (1) when the effects of each of the latter four factors on reading literacy were removed, the average reading literacy was still significantly lower than the average for every province except Prince Edward Island; (2) even when all four factors were taken together, the discrepancy between Newfoundland and Labrador and the nation was barely altered; and (3) the brain drain factor (many educated adults emigrate to other parts of Canada) appeared to be significant. Findings suggest that demographics cannot account for the lower than average reading literacy in Newfoundland and Labrador. (Eight tables and seven figures of data are included.) (RS)