In May 1912, Sifton expanded his cabinet, and Stewart was made the province's first Minister of Municipal Affairs. As was required by the custom of the day when an MLA was appointed to cabinet, he resigned his seat to run in a by-election, in which he easily defeated Conservative William John Blair. In cabinet, he became known as an advocate of public ownership of utilities, which placed him more in sympathy with the Conservative opposition than with Sifton. Despite this position, he backed Sifton's 1913 resolution to the Alberta and Great Waterways problem, which involved partnering with the private sector; this vote marked the first time that the Liberal caucus was united on the railways question since before the scandal broke in 1910.