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Government reports and documents claim that building a knowledge economy and innovative society are key goals in Canada. In this paper, we draw on critical policy analysis to examine 10 Canadian federal government training and employment policies in relation to the government's espoused priorities of innovation and developing a high skills society and economy. Our findings highlight three areas of contradiction: a tension between high skills and low skills policy, a contradictory focus on the socially and economically excluded and included, and the paradox of both an active and passive federal government. Drawing on state theories such as inclusive liberalism and the social investment state, we argue that while a 'highly skilled knowledge economy' may form part of the overall skills discourse, these contradictions raise doubts that it is to become a reality in Canada in the near future.

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