McCrae was first elected to the Manitoba legislature in the 1986 provincial election, defeating New Democratic Party candidate Arnold Grambo by 1409 votes in the riding of Brandon West. The NDP under Howard Pawley narrowly won the election, and McCrae joined 25 other Progressive Conservatives in the opposition. In 1988, the Pawley government was brought down by disgruntled NDP backbencher Jim Walding. The Progressive Conservatives won a minority government in the election that followed; McCrae was re-elected over Liberal candidate John Worley by 1421 votes, with the NDP falling to third place. On May 9, 1988, McCrae was appointed Attorney General in 1990, Minister of Consumer and Corporate Affairs and Minister of Cooperative Development, with responsibility for Constitutional Affairs and the Liquor Control Act. On April 21, 1989, he was relieved of all his ministries and responsibilities except for the primary portfolio of Attorney-General. McCrae was easily re-elected in the 1990 provincial election, defeating NDP candidate and future Brandon mayor Shari Decter Hirst. He was kept in the Justice portfolio and once again given responsibility for constitutional affairs and the Liquor Control Act, as well as Corrections and most of The Corrections Act. As Justice Minister, McCrae was responsible for implementing Canada's first administrative license suspension program for impaired drivers. On constitutional matters, he declared that Manitoba would assist in bringing about aboriginal self-government. Following a cabinet shuffle on September 10, 1993, McCrae was named as Manitoba's Minister of Health. He was again re-elected without difficulty in the 1995 provincial election. During his time as Health Minister, McCrae made the controversial decision to shut down the emergency rooms in Winnipeg's community hospitals in favour of more centralized E.R. services. A further cabinet shuffle on January 6, 1997 made McCrae Minister of Environment and Government House Leader, with responsibility for the Manitoba Public Insurance Corporation Act. As Environment Minister, McCrae was criticized by the Sierra Club for refusing to bring in plans to reduce greenhouse gas emissions. In the final cabinet shuffle of Filmon's government on February 5, 1999, he was named Minister of Education and Training. Filmon's Conservatives were defeated by the New Democratic Party under Gary Doer in the 1999 provincial election. Notwithstanding his long service in government, McCrae lost Brandon West by 352 votes to Scott Smith of the NDP.
After provincial politics
After leaving the assembly, McCrae became a real estate agent. He ran for Mayor of Brandon in 2002, but lost to Dave Burgess. His campaign was hindered by local opposition to some of the decisions he had made while in government. He did not seek re-election to the provincial legislature in 2003. He was re-elected to Brandon City Council in October 2006 after a 20-year hiatus. He also wrote a book in 2006, Dancing Winds, a romance set during the second World War at a concentration camp. McCrae was acclaimed to city council in 2010. In April 2013, McCrae resigned from Brandon City Council. In May, he was named a part-time Citizenship Judge for Winnipeg.
