Today’s top stories from Report on Business:

Economy growing, but on life support

The global economy continues to recover, but is being kept afloat by massive government stimulus, historic measures by central banks and bailouts. As the Bank of Canada held interest rates steady today, it noted that while global growth projections are somewhat better than it forecast in October, the recovery “continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”

The central bank kept its benchmark overnight rate at 0.25 per cent this morning, and promised again to hold it there, depending on inflation. It tweaked its Canadian economic forecasts, and also warned again that the strong Canadian dollar and weak U.S. demand continue to be “significant drags” on the economy.

In a separate report today, the Conference Board of Canada noted that U.S. companies will have to create more jobs if a recovery is to be sustainable once the effects of stimulus measures ebb. “Without a pickup in employment over the next few months, households will not experience the increase in incomes required to support sustained gains in consumer spending, a necessary condition to solidify the nascent recovery,” the group said.

In Canada, it added, the government’s stimulus program, geared toward infrastructure work, will also peak this year. “The stimulus will help compensate for Canada’s relatively soft recovery in private sector investment and exports, both of which were hit hard in 2009.”

The flip side of this, of course, sees fat government debts, already an issue for markets and ratings agencies.

“In 2011, mounting fiscal deficits are expected to drive policy makers to pull back hard on the reins of fiscal policy,” the Conference Board said. “By then, the global economic recovery is expected to be well under way and able to absorb the contractionary fiscal and monetary policy.” Read the story

Google delays phone launch in China

The battle between the world’s top Internet search engine and the biggest Internet market is fast escalating. Google Inc. said today it is delaying the China launch of two smart phones that run on its Android operating system. Google has threatened to pull out of China, and said it won’t censor its Chinese site any longer, after a hacking attack on Gmail users said to have targeted human rights activists. The Dow Jones news agency noted this morning that the fight between Google and Beijing is now affecting not only Google’s business but that of its partners. Google had planned to launch two phones tomorrow manufactured with partners Samsung Electronics Co. Ltd. and Motorola Inc. with a Chinese mobile carrier. Read the story

Related: Why Google isn’t racing from China

Kraft-Cadbury deal marries key brands

Kraft Foods Inc. has won its four-month quest for Britain’s iconic candy company Cadbury PLC, which agreed today to a takeover valued at about $19.6-billion (U.S.). The marriage of Kraft and Cadbury will create the biggest chocolate and candy company in the world, overtaking Mars. Combined revenues would be in the range of $60-billion a year, not enough to oust Nestlé as the biggest food company. The takeover will put some of the world’s leading brands under one roof, joining Kraft’s Toblerone chocolate and Oreo cookies with Cadbury’s Dairy Milk chocolate bars, Trident gum and Halls cough drops. The combined company, besides having huge positions in developed countries, will also have a leading role in major developing markets such as the BRIC countries – Brazil, Russia, India and China. Read the story

Conoco, Total to expand oil sands project

The oil sands continues to pick up steam. ConocoPhillips and Total SA said today they planned expand their joint venture Surmont project to 110,000 barrels a day, or four times what it is now. During the crisis and as oil prices fell, several projects were put on hold. But recently, with costs down, companies are ramping up again. “Oil supply from the oil sands is going to be required to meet long-term global demand and play a role in energy security and economic security for North America,” Matt Fox, president of the ConocoPhillips Canadian unit, told the Reuters news agency. Read the story

Citigroup loss improves, but still hefty

Citigroup Inc. may have posted a hefty fourth-quarter loss, but on an optimistic sign noted that credit troubles are stabilizing, particularly in its foreign operations. Citigroup this morning posted a quarterly loss of $7.57-billion (U.S.) or 33 cents a share, narrower compared with the loss of $17.26-billion or $3.40 a year earlier. Revenue fell more than 4 per cent to $5.41-billion. Much of Citigroup’s loss, more than $6-billion, was related to paying back $20-billion in aid from the U.S. government. Also hitting its earnings were provisions for bad loans, at $8.18-billion. But, that provision for loan losses was down by 10 per cent from the third quarter and 36 per cent from a year earlier at the height of the crisis. Read the story

Hydro-Québec to scale back New Brunswick Power deal

Hydro-Québec has agreed to a scaled-back deal that will see it pay $3.2-billion for New Brunswick Power’s electricity generation assets but not – as initially planned – take over the utility’s transmission and local distribution assets, sources say. Hydro-Québec will act as a wholesaler, selling its electricity to New Brunswick Power Corp., but it will not get into power distribution to the New Brunswick utility’s 370,000 customers, said sources close to the negotiations which led to the revamped agreement. The revised memorandum of understanding is to be officially announced Wednesday. Read the story

UBS cuts potash profit forecasts

UBS Securities Canada has cut its profit forecasts for Potash Corp. of Saskatchewan and Agrium Inc., citing projections for lower offshore and domestic prices. In a research note by analyst Brian MacArthur, UBS cut its earnings per share estimates for 2010 for Potash to $6.30 (U.S.) from $6.79, and for 2011 to $8.75 from $9.07. Its price target is now down to $116 from $120. For Agrium, earnings per share estimates were cut to $5.15 for 2010 from an earlier $5.20, and for 2011 to $7 from $7.33. It held its price target at $72.

Japan Airlines on a wing and a prayer

Japan Airlines filed today for bankruptcy protection, with plans to cut 16,000 jobs, slash pensions and trim routes. The collapse, one of Japan’s biggest, was expected as the airline was crippled by almost $26-billion (U.S.) in debt. JAL will be kept afloat by billions in government aid. “This is our last chance,” said JAL president Haruka Nishimatsu, who resigned. “I believe we can be reborn as an airline that can represent Japan again.” Read the story

Britain cracks down on drinking

The British government is cracking down on binge drinking in the country’s pubs. Home Secretary Alan Johnson said today the first of five measures will come into effect in April, banning promotions such as all-you-can drink specials, speed drinking competitions and what is known as the “dentist’s chair,” where friends pour drinks into someone’s months. Later measures will include compulsory identification checks and ensuring smaller drinks can be had. Britain estimates that alcohol-related crimes cost the economy up to £13-billion a year and, said Mr. Johnson, “these practices have a real impact on society, not to mention the lives of those who just want to enjoy a good night out.”

From today’s Report on Business

Alberta beer ad rings Ontario’s bell

REITs lift commercial real estate

New Chilean president cheers Canadian miners