Callbeck returned to politics in 1988 when she was elected to the federal House of Commons as an MP for the Liberal Party of Canada. She was the MP for Malpeque during the 34th Canadian Parliament. During her time in the House of Commons, Callbeck sat on numerous legislative committees, the Standing Committee on Energy, Mines and Resources and the Standing Committee on Consumer and Corporate Affairs and Government Operations. She held various Critic responsibilities in the national Liberal caucus of Liberal Party Leader John Turner and Jean Chretien. Callbeck was Critic for Finance, Critic for Consumer and Corporate Affairs, Assistant Critic for Treasury Board, and Critic for Energy, Mines and Resources.
In January 1993 she returned to provincial politics to successfully run for the leadership of the Prince Edward Island Liberal Party and was appointed Premier on 25 January. Under her leadership the Liberals won the 1993 provincial election, making her the first female leader of a political party in Canada to lead her party to victory in a general election. Callbeck was premier at the same time as the other three most important public offices in the province were also held by women: Elizabeth II was Sovereign in Prince Edward Island, Marion Reid was the Lieutenant Governor, and Patricia Mella was the Leader of the Official Opposition. In addition, the two most elected senior roles within the Legislative Assembly of Prince Edward Island are held by women during Callbeck time in office: Nancy Guptill was Speaker of the Legislative Assembly of Prince Edward Island and Elizabeth Hubley as Deputy Speaker. Callbeck's time in office was marked by significant progress. Spurred by new investments in food processing, manufacturing, aerospace and information technology, the rate of economic growth between 1993 and 1996 was the second highest in Canada. The number of people working in the province reached an all-time record high. The unemployment rate dropped by a whopping seven per cent, the largest reduction of any province in Canada. Coming into office, the Callbeck government pledged to bring the high budget deficit under control. Under her predecessor, the deficit had risen to an all-time high of $89 million. Through a combination of rising revenues due to the stronger economy, and what a national accounting firm called one of the most aggressive deficit cutting strategies in the country, the Callbeck government brought in a surplus budget in 1995–96. it was the first budget surplus in a decade. Reaching a surplus budget, however, did not come without a political cost. Public service salary rollbacks were widely opposed by public service unions - but no jobs were cut. There were other accomplishments. A new agreement on electricity with New Brunswick resulted in lower electrical costs. A new waste management project put Prince Edward Island as a leader in Canada in reducing the amount of waste going into landfills. In keeping with Callbeck's commitment to strengthen social programs, new investments were made in health and education. There were significant reforms. Municipal amalgamation reduced duplication and overlap in the province's larger municipalities. The number of government departments, agencies and crown corporations was reduced. A new electoral system replaced the previous 16 dual-member ridings to 27 single-member ridings. It was the first significant electoral reform in more than a century. Callbeck's time in office saw the beginning of construction of the Confederation Bridge linking Prince Edward Island to New Brunswick. When Callbeck came into office, the project was stalled because of an impasse between federal and provincial officials. She worked closely with the federal public works minister to resolve the issues, and the resulting constitutional change paved the way for the largest capital project in the history of the province. In just over three years, the Callbeck government achieved a major turnaround in the outlook of the province, and inspired renewed confidence in its people.
Resignation
Callbeck resigned in October 1996 after only three and a half years as PEI's premier. The Liberal party lost the provincial election in November 1996 as well as the next two general elections, only returning to power in the 2007 election.
Senator
On September 23, 1997 she was appointed to the Senate of Canada by Prime Minister Jean Chrétien She sat on numerous Standing Committees and held membership on others. She initiated the motion that led to the Senate's first study on post-secondary education in more than 20 years. In January 2014, Liberal Prime Minister Justin Trudeau announced that all Liberal senators were removed from the national Liberal caucus, and would continue sitting as Independents. The Senators referred to themselves as the Senate Liberal Caucus even though they were no longer members of the parliamentary Liberal caucus. She left the senate at the mandatory retirement age of 75.
Chancellor
On September 29, 2018, Callbeck was appointed as Chancellor of the University of Prince Edward Island by the university's Board of Governors. She is the Ninth Chancellor in the history of UPEI. Callbeck holds an honorary doctorate of law from UPEI. A former teacher, her commitment to education and post-secondary institutions has spanned much of her professional and political careers.
