Elected to the Legislative Assembly of Ontario as the Labour candidate for the riding of Kenora in the 1919 election, Heenan was re-elected in 1923. When the Legislature was not in session, he would resume driving locomotives. Under Heenan's leadership, the Labour MPPs joined with the United Farmers of Ontario to form a coalition government under E.C. Drury, with the understanding that Drury would support Edward Wellington Backus' plans for erecting a newsprint mill in Kenora. Heenan was also instrumental in getting Harry Mills appointed as the Province's first Minister of Mines.
He was elected as the Liberal candidate to the House of Commons of Canada representing the riding of Kenora—Rainy River in the 1925 federal election. He was re-elected in 1926 and 1930. From 1926 to 1930, he was the Minister of Labour, and became known as "Peter the Peacemaker" for settling 160 labour disputes in his first three years. He secured the passage of the Mother's Allowance Act and the Old Age Pensions Act. Heenan still found time to work as a locomotive engineer when the House was not in session. In 1934, during a debate, he exclaimed, "I wanted to be unique. I wanted to be the only man that the Conservatives have put into overalls."
Liberal MPP and Ontario Cabinet Minister (1934-1943)
Heenan resigned his federal seat, after winning a provincial seat as the Liberal Party of Ontario candidate in the 1934 election for the riding of Kenora. He was re-elected in 1937. From 1934 to 1941, he was the Minister of Lands and Forests in the provincial government of Mitchell Hepburn. Heenan was charged with promoting Hepburn's policies on natural resource development, including the aggressive position with respect to timber licenses in Northern Ontario that were being held by companies that would not cut wood on them. In that regard, in 1936 the Forest Resources Regulation Act was passed that granted the government broad powers for mandating minimum production quotas, maximum limits in line with good forestry practice, reducing licensed acreages where they were in excess of requirements, and increasing stumpage fees on companies "operating or carrying on business in a manner detrimental to the public interest." Great Lakes Paper saw its holdings reduced from to, and was assessed a $500,000 penalty for refusing to participate in a minimum price agreement set up by the Ontario and Quebec governments. He also sought to exploit other uses for provincial lands. In 1941, he announced that one-seventh of all Crown land, amounting to, was being made available for lease to individuals, sportsmen's clubs and commercial camp owners. The 1938 collapse of the Lake Sulphite Pulp Company's operation at Red Rock led to Opposition charges of ineptness in the policies of the Department of Lands and Forests. Following hearings by a legislative committee in the matter, Heenan and his deputy minister tendered their resignations. He was subsequently appointed as provincial Minister of Labour. Heenan took good care of his constituents' interests, and arranged for many improvements for Northwestern Ontario, including the construction of the Heenan Highway to serve Kenora and Rainy River.