Two important parameters of hydrological droughts are the longest duration and the greatest severity (in standardized form) over a desired return period (say T years), referred to as critical drought. The long-term mean of the annual flow sequences has been used as the truncation level for defining hydrological drought. Two well-known approaches-time series simulation and a probability theory-based approach-were used to estimate drought parameters. The drought episodes are treated as runs of deficits, and so the theory of runs forms a major tool for analysis. The sample estimates of the mean, coefficient of variation (or standard deviation), skewness, lag-1 serial correlation, and/or information on the probability distribution of flow sequences, are the basic input parameters in both approaches. The applicability of both approaches was tested for deducing drought parameters across Canada, with emphasis on northwest Ontario, a region bordering Lake Superior. Natural annual flow sequences in this region can be treated as normal independent sequences in the stochastic sense. The results of the probabilistic approach yielded marginally better results than the simulation approach. A main advantage of the probabilistic approach turned out to be parsimony with only two parameters, viz. drought probability at the truncation level and return period for normal independent annual flow sequences. Furthermore, estimates of the greatest standardized severity can be taken as equal to the longest duration, thus eliminating the need for severity analysis. The regional variation of droughts in northwest Ontario was portrayed through a map plotting the values of drought potential index (DPI). In northwest Ontario, a 100-year drought may persist continuously for 6 years and a 25-year drought for 4 years. The DPI map indicated proneness to drought along the Ontario-Manitoba border in the northwest Ontario region.