Loyola Sullivan brought down Newfoundland and Labrador's first surplus budget six years ago. (CBC )

A former Newfoundland and Labrador finance minister says the provincial government should retire its still substantial debt before an oil-fuelled boom ends.

Loyola Sullivan, who was finance minister in the first term of the Danny Williams government, said while the government has eliminated several billion dollars in debt, it still has a millstone around its neck.

He noted the per capita debt of about $16,000 remains the highest in the country.

"Even with the latest census population increase, it would only reduce our per capita debt by less than 50 dollars per year [per person]," Sullivan told delegates attending a Newfoundland and Labrador Employers Council meeting in St. John's.

"There is only one logical option, and that is to pay down debt."

The overall accumulated provincial debt, which includes unfunded pension liabilities, has hovered over $8 billion for a few years.

Last fall, Finance Minister Tom Marshall said he planned to use an expected windfall of about $755 million for the current fiscal year to reduce the debt. Marshall has since warned, however, that the province is heading into the next fiscal year with a projected deficit.

In 2006, Sullivan introduced the first of a series of surplus budgets. Before resigning from cabinet later that year, he even suggested the province make deficit financing illegal.

In his speech on Thursday, Sullivan noted that while the offshore oil industry now accounts for one quarter of the province's gross domestic product, no proven oil reserves have been discovered since the 1980s.

Sullivan said the interest still used to service the provincial debt could be used for better things.

"That's 600 million it does not have to spend on investments in technology, infrastructure, health, education and on other needs," said Sullivan, who noted less debt would be a boon for future generations.

"The greatest material gift is a lesser debt burden on their shoulders."

Sullivan's speech attracted some attention and controversy. Now an executive at Ocean Choice International, Sullivan and other OCI managers were met by angry members of the Fish, Food and Allied Workers union. OCI and the FFAW are locked in a war of words over closed plants and the lockout of trawler workers.

Sullivan was also in the news earlier this week after the federal ethics commissioner agreed to take a look at whether Sullivan breached guidelines in taking his OCI post soon after resigning as a federal fisheries ambassador.

Sullivan has said he did not break conflict rules in taking on the job at OCI, which is managed by two of his brothers.