In the 2003 provincial election, Racco defeated Susan Kadis for the Liberal nomination in Thornhill and ran against Tina Molinari, an incumbent from the Progressive Conservatives. Denominational education was a leading issue in this campaign, with Molinari supporting the extension of tax credits for religious education and Racco opposing it; some members of Thornhill's Orthodox Jewish community supported Molinari because of this issue. Racco eventually won by 796 votes. On March 6, 2006, he was appointed as Parliamentary Assistant to the Minister of Labour.