A study determined the causes of adult literacy and illiteracy in Newfoundland and Labrador (Canada) as perceived by those in a position to set literacy policy, and used Statistics Canada data from a national adult literacy survey to critique some of these perceptions. Data for the first objective was gathered from a sample of 67 individuals representing a cross-section of educational and literacy policy-makers and advocates across Newfoundland and Labrador. Data for the second objective included direct measures of literacy and demographic information on a random sample of individuals living in Canada. Results indicated that the policy-makers: (1) cited most frequently the school drop-out rate as the cause of illiteracy; (2) believed that parental and home background educational resources were principal contributors to adult illiteracy; (3) believed that greater, more systematic, and higher quality effort and training in the area of adult literacy program development and services was the most promising way to increase the provincial literacy rate. Results of the Statistics Canada data indicated that Newfoundland and Labrador showed significantly lower literacy performance, and that significant differences existed between individuals who lived on different sides of the urban-rural continuum. Findings suggest that the needs and interests of rural residents in Newfoundland and Labrador have not been given the attention they deserve. (Three tables of data are included.) (RS)