He held senior ministerial positions in the governments of John Bracken, Stuart Garson and Douglas Campbell, and served as the province's 14th Lieutenant Governor between 1953 and 1960.
One-time Cooperative Commonwealth Federation leader Lloyd Stinson described him as the most right-wing member of the Liberal-Progressive government, and also accused him of being anti-labour.
In the election 1941, held after the creation of a grand coalition ministry with the Conservatives, CCF and Social Credit, he was the most popular candidate in the first preferences.
McDiarmid retained the Land and Natural Resources/Mines portfolios for the entirety of his time in cabinet, and was also Provincial Secretary from November 28, 1939, to February 14, 1946, Railway Commissioner and Minister of Industry and Commerce from November 4, 1940, to June 30, 1953, and (briefly) acting Labour Minister following the resignation of CCF leader Seymour Farmer in 1942.
During his time in cabinet, McDiarmid was responsible for legislation opening northern Manitoba's mine fields to development.
He served in this largely ceremonial position until January 15, 1960, when he was replaced by former Progressive Conservative party leader Errick Willis.