Drought conditions caused by soil moisture stress and/or high vapour pressure deficit pose a challenge to many terrestrial ecosystem models (TEMs). The Canadian LAnd Surface Scheme Including biogeochemical Cycles (CLASSIC) employs an empirical approach to link soil moisture stress with stomatal conductance. Such soil moisture-based empirical approaches typically perform poorly during drought. Here, we implemented an explicit plant hydraulics parameterization, i.e., Stomatal Optimization based on Xylem hydraulics (SOX), in CLASSIC, thereby connecting the soil-plant-atmosphere continuum through plant hydraulic traits. Performance of the resulting CLASSIC$_{SOX}$ was evaluated against carbon and water fluxes measured with eddy covariance at eight boreal forest flux tower sites in North America. Compared to CLASSIC, CLASSIC$_{SOX}$ better simulated gross primary productivity (GPP) across all sites, i.e., coefficient of determination (R$^{2}$) increased (0.51 to 0.59), root mean square error (RMSE) and bias decreased (1.85 to 1.54 g C m$^{-2}$ d$^{-1}$) and (-0.99 to -0.58 g C m$^{-2}$ d$^{-1}$), respectively. Under drought conditions, identified using the Palmer drought severity index, GPP simulated with CLASSIC$_{SOX}$ improved compared to CLASSIC, i.e., R$^{2}$ increased (0.51 to 0.60), and RMSE and bias decreased (1.79 to 1.46 g C m$^{-2}$ d$^{-1}$) and (-0.97 to -0.53 g C m$^{-2}$ d$^{-1}$), respectively. In contrast, CLASSIC$_{SOX}$ simulated evapotranspiration worsened, i.e., R$^{2}$ decreased (0.61 to 0.42), RMSE increased (0.54 to 0.62 mm d$^{-1}$), and bias changed direction (0.09 to -0.09 mm d$^{-1}$). As evaporation is a highly parameterized process in CLASSIC, it likely needs to be re-parameterized to account for the SOX transpiration behaviour.