McCarthy was first elected to the Canadian House of Commons in the 1878 federal election as a Conservative. An Irish-born Protestant, McCarthy was stridently anti-Catholic and anti-French Canadian. He broke with the Conservatives in the 1890s, running and being re-elected as an Independent Member of Parliament (MP) in the 1891 election. McCarthy was a founder of the "Imperial Federation League", which proposed uniting the United Kingdom and the emerging dominions under a central Cabinet government responsible to an Imperial Parliament elected from throughout the Empire. McCarthy ran his own slate of McCarthyite candidates in the 1896 election, but was the only one elected.