On July 9, 2008, Sukh Dhaliwal wrote a letter of recommendation to a U.S. District Court judge on official House of Commons stationery in support of convicted international drug trafficker Ranjit Singh Cheema.
He was the federal Liberal candidate for the Newton-North Delta riding in 2004, but lost to Conservative Gurmant Grewal by just over 500 votes. After a turbulent term in office, Grewal decided to not seek re-election, and in 2006 Dhaliwal faced Conservative newcomer Phil Eidsvik. The NDP was also strong in the riding, and 2004 candidate Nancy Clegg, who finished less than a thousand votes behind Dhaliwal, also ran again. Dhaliwal succeeded in winning the seat by 1300 votes.
In the 2006 Liberal Leadership campaign, Dhaliwal initially supported Joe Volpe. After Volpe encountered a fundraising scandal, Dhaliwal withdrew his support and moved to support Michael Ignatieff. Dhaliwal was instrumental in building support for Ignatieff's campaign in the Sikh community. Following Volpe's withdrawal from the race during the convention speeches, Dhaliwal was instrumental in convincing many of Volpe's Sikh delegates to support Ignatieff's campaign.