Mahoney supported Paul Martin in the 1990 federal Liberal leadership convention, but subsequently opposed efforts by other Martin supporters to remove Jean Chrétien from the leadership position. During his time in parliament, he was considered a Chrétien loyalist. On April 11, 2003 Chrétien appointed Mahoney Secretary of State for selected Crown Corporations. His primary responsibility was the Canadian Mortgage and Housing Corporation, and he was generally regarded as minister responsible for affordable housing. Mahoney was demoted to the backbenches again when Paul Martin became Prime Minister of Canada on December 11, 2003.