Bank of Canada governor Stephen Poloz said Tuesday there could be room to improve the North American Free Trade Agreement.

He was speaking after a speech in which he praised free trade, foreign investment, and immigration as cornerstones of the Canadian economy throughout history.

"There are things in NAFTA that are incomplete," said Poloz, responding to an audience question after the speech.

"Softwood lumber is not in NAFTA, the rules of origin are pretty complicated, and so on. So there may be things to be done to improve NAFTA, so I welcome a dust-off, if you like, of NAFTA in that basic sense."

Although Poloz didn't explicitly refer to U.S. President Donald Trump's protectionist vows to renegotiate the free trade agreement, he argued in favour of NAFTA and free trade in his prepared remarks.

"Many Canadians resisted continental free trade, fearing job losses, the possible loss of our health care system, and a general loss of Canadian economic or even political sovereignty," said Poloz, according to the text of his speech, which is available online.

"None of these concerns have come to pass, although heightened competition did result in job losses in some sectors. But these losses were more than offset by gains in other areas, and consumers have continued to benefit from lower prices and increased purchasing power as most tariffs were eliminated."

Poloz argues against protectionism

In response to another audience question, Poloz argued that people may be losing sight of the benefits of free trade as protectionism gains political traction around the world.

"Certainly, I think that whenever there is a tendency towards protectionism, it's often the case that people just forget the benefits of openness. The fact that we have free trade agreements in place may mean you pay, say, 30 per cent less for a garment than you would if there wasn't a free trade agreement in place," said Poloz.

"But that was a long time ago, and it's just become part of your baseline, and you don't really think about it much. But if we were to reverse that tomorrow, it would be a huge impact on your well-being. Say you had to pay 20 per cent more for every article of clothing that you bought. Well, that would be a significant hit to your spending power."

"History tells us that [trade protectionism] is not a recipe for progress," said Poloz.

Openness and economic progress

In his speech, delivered to university students and alumni at Durham College in Poloz's hometown of Oshawa, Ont., the Bank of Canada governor argued that free trade, foreign investment and immigration all played critical roles in building Canada's economy throughout history.

"When trade barriers are falling, when people are coming to our shores and when investment is rising, Canadians prosper. We saw this before Confederation, in the early 1900s and after the Second World War," said Poloz.

"The flip side is that responding to tough economic times by turning inward rarely succeeds. We saw this after Confederation and during the Great Depression," he said.

"The bottom line of our history is that openness and economic progress go hand in hand."​