Strictly speaking, a Newfie is a slang term for a person who lives on the island of Newfoundland. It is not necessarily derogatory but it is often used in that context by non-Newfoundlanders. Many Newfoundlanders are very offended to be referred to as Newfies, while others find it perfectly acceptable. As a rule of thumb, a "mainlander" should not consider it ok to call someone a Newfie, any more than they would call a stranger on the street a redneck. (the connotation is similar)
I only bring this up because the only times I've heard the word "newfie" outside of my home province is in a nasty context. Examples: "Goofy Newfie", "Stupid Newfie", and "Goddamn welfare suckin' lazy-ass Newfie". Of course, the same people that would say these things swallow their words pretty fast when they find out where I'm from...we don't all wear sou'westers, collect dole, and go drinkin' with our rubber boots on.