Federal Cabinet Minister
In 1926, Dunning was courted by Federal Liberals, to join the minority government of Prime Minister William Lyon Mackenzie King. He won the seat of Regina by acclamation in a by-election held in March, and was immediately appointed to Cabinet as Minister of Railways and Canals.
By June, King was no longer able to govern, as a result of political scandal and the withdrawal of support by the Progressive Party. King went to Governor General Lord Byng of Vimy asking Byng to dissolve Parliament and call a general election. Byng refused, relying on the reserve power invested in him by the Imperial Government. Instead he asked Conservative Leader, Arthur Meighen to form a government. Dunning was now in opposition.
The matter continued over the summer. King took the position that Byng's refusal was unwarranted Imperial interference in Canadian affairs. King's grievance with the Governor General gained momentum when Meighen refused to swear in his cabinet, and instead appointed "acting ministers", pending a delayed vote of confidence. While this ongoing drama played out (the King-Byng Affair), there was doubt in Liberal ranks about King's viability as leader. A movement began to take shape among leading Liberals to draft Dunning as a replacement.
By September, King had convinced the Progressives to support him in a non-confidence vote. The Conservatives lost and the Liberals won the ensuing general election. King (and the leaders of the other Dominions) won recognition of autonomous status from the Imperial government (the Balfour Declaration of 1926) followed by the Statute of Westminster 1931. Doubts about King's status ended.
Dunning had won a contested race by 900 votes, and had again appointed to the same cabinet portfolio, but the relationship was never easy thereafter. King regarded Dunning as a threat.
During his time as Minister of Railways and Canals, Dunning was a staunch supporter of Sir Henry Thornton, the U.S.-born Englishman who, in 1922 had taken over the presidency of the Canadian National Railways. In that portfolio, Dunning established himself as a friend of the Western farmer.
Decisions made during his tenure included his accession to a petition from area farmers to have the Canadian National Railways build a branch line through his old home of Beaver Dale to Parkerview, Saskatchewan. He also settled a longstanding debate by choosing Churchill, Manitoba as the terminus of the Hudson Bay Railway. Upon completion of the railway and port facilities in 1931, Churchill became the closest Canadian port to Liverpool. The shipping route to Churchill was 1,600 kilometres shorter than the old overland route to Montreal.
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