Jun 17, 2009. /Lesprom Network/. Canada is expected to lay out plans on Wednesday to aid the country's pulp and paper industry, which says it has become the unintended victim of a tax windfall enjoyed by U.S. rivals, Reuters reports. Ottawa has been scrambling to come up with a response to the U.S. "black liquor" tax credit, which critics say has been misused by some American pulp mills, allowing them to overproduce at a time when the pulp market is already saturated. Canada's forestry industry has been hammered by the economic crisis and the collapse of the U.S. housing market, and Ottawa has been under pressure to provide some assistance after coming to the aid of the auto sector. Natural Resources Minister Lisa Raitt has scheduled a news conference in Ottawa for Wednesday to announced a "new program that will lay the groundwork for a greener, more sustainable future for Canada's pulp and paper industry." Ottawa has been looking for ways to provide financial support for the forestry sector without violating the anti-subsidy restrictions of the U.S.-Canada Softwood Lumber Agreement. At issue is a byproduct called black liquor, produced when wood is processed into pulp to make paper. Paper makers have traditionally used the byproduct as a fuel to help run their mills and cogeneration facilities. But last year, U.S. companies such as International Paper Co, Verso Paper Corp and Temple-Inland Inc began adding small amounts of diesel to the black liquor byproduct to qualify for a biofuel tax credit. Critics say that is a misuse of a tax program that was designed to promote the use of alternative fuels, but supporters say U.S. pulp producers are simply taking advantage of a tax measure available to other industries. Some industry analysts have projected the tax break could be worth up to $8 billion for U.S. producers in 2009. The windfall has been so large there have been calls in the U.S. Congress to end the tax credit at the end of September, three months earlier than planned. Raitt has said Ottawa will not launch its own alternative fuel credit, but officials have been looking at how they might help pulp and paper producers develop their own alternative energy facilities. Many mills already generate the power they need for pulp and paper manufacturing, and the government could help them develop facilities for selling any excess energy produced to regional utilities.