The government has to look at changing the labour code to include the economy as an essential service, Labour Minister Lisa Raitt said Friday — a day after Air Canada and CUPE agreed to go to binding arbitration and avoid a work stoppage.

After threatening back-to-work legislation for both Canada Post and Air Canada in June, and sending a second Air Canada dispute to the Canadian Industrial Relations Board to stop a strike, Raitt says it's clear in the government's legislation that they look to economic reasons as well as to the way the labour code defines essential services.

Asked whether she's considering redefining the code to include the economy as an essential service, Raitt says it's "a big question" she's examining with an advisory committee made up of academics and union and management representatives.

"It’s a big discussion that has to happen," Raitt said to Rosemary Barton on CBC's Power & Politics.

"What we do, and of course you can see that in our legislation, is that we deem not necessarily in terms of essential services, but when we see there’s effect on the national economy, we introduce an act in Parliament to ensure there’s not a work stoppage."

"Our code is specific that it has to be health and safety in order to avoid a work stoppage.… But we are seeing more and more this notion of the economy."

Air Canada and CUPE move to binding arbitration

Earlier in the day, Raitt offered her congratulations to Air Canada and its unionized flight attendants after they agreed to go to binding arbitration and avoid a work stoppage.

"This negotiated settlement is unquestionably in the best interest of employees, the travelling public and the Canadian economy," Raitt said in a statement. "I commend both parties for their continued efforts in resolving this labour dispute."

Late Thursday, the airline and the union announced they have agreed to let the Canadian Industrial Relations Board act as an arbitrator to resolve the contract dispute.

The airline and the union representing its 6,800 flight attendants have two weeks to come to an agreement and negotiate a deal through the board. Neither side can engage in any work disruption during the binding process.

A CUPE spokesperson told CBC News Friday that both sides dropped their complaints of unfair labour practices as a condition of the arbitration process. CUPE also said it is the union's expectation that the board will notify Raitt that her two ministerial referrals are now "moot."

Those referrals related to health and safety concerns if there were a work stoppage, and an investigation into the breakdown of the collective bargaining process after the membership twice rejected tentative agreements.

The federal government said last month it would introduce back-to-work legislation if necessary, even as it referred the dispute to the CIRB. The NDP criticized those moves as interfering in negotiations, but Raitt defended the government's decision.

"Our government remains supportive of the concept of free collective bargaining, and as I have always stated, it is best when both parties work together to achieve an agreement," Raitt said in Friday's statement.

The flight attendants had rejected two tentative contracts and were on the verge of going on strike when Raitt referred the matter to the CIRB.

On Friday, the flights attendants, backed by their supporters, staged a noon-hour rally in front of Parliament Hill to show their public displeasure with the federal government.