CUSMA Rules of Origin Regulations — 18
 the high-wage material expenditures used in production; NC is the net cost of the vehicle; HWTC is the credit for high-wage technology expenditures; and HWAC is the credit for high-wage assembly expenditures. (b) the requirement based on total annual purchase value is determined by the formula LVC = ( (APV + HWLC) (TAPV + HWLC) X 100) + HWTC + HWAC where APV is the annual purchase value of high-wage material expenditures; HWLC is the sum of the high-wage labour costs incurred in the assembly of the vehicle which may be included in the numerator at the choice of the producer and, if included, must also be included in the denominator; TAPV is the total vehicle plant assembly annual purchase value of parts and materials for use in the production of the vehicle; HWTC is the credit for high-wage technology expenditures; and HWAC is the credit for high-wage assembly expenditures. High-wage material expenditures (7) The high wage material expenditures is calculated by adding the APV or net cost, depending on the formula used, of (a) a self-produced high-wage material used in the production of a vehicle; (b) an imported or acquired high-wage material used in the production of a vehicle; (c) a high-wage material used in the production of a part or material that is used in the production of an intermediate or self-produced part that is subsequently used in the production of a vehicle; and (d) a high wage material used in the production of a part or material that is subsequently used in the production of a vehicle. Recommendation (8) It is suggested, but not required, that the vehicle producer calculate the high-wage material and labour expenditures in the order described in subsection (7). A vehicle producer need not calculate the elements in paragraph (7)(b) to (d) if the previous element or elements is sufficient to meet the LVC requirement. High-wage technology expenditures credit (9) The HWTC is based on annual vehicle producer expenditures at the corporate level in one or more CUSMA countries on wages paid by the producer for research and development or information technology, calculated as a percentage of total annual vehicle producer expenditures on wages paid to direct production workers in one or more CUSMA countries. Expenditures on capital or other non-wage costs for research and development or information technology are not included. HWTC calculation (10) The HWTC is determined by the formula The annual producer expenditures for research and development and information technology are divided by the total annual vehicle production expenditures and the quotient is multiplied by one hundred. Wages for research and development (11) For the purposes of subsection (10), expenditures on wages for research and development include wage expenditures on prototype development, design, engineering, testing and certifying operations. HWAC — passenger vehicles or light trucks (12) A high-wage assembly credit of five percentage points may be included in the LVC for passenger vehicles or light trucks produced by a producer that operates a high-wage assembly plant for passenger vehicle or light truck parts or has a long-term supply contract for those parts — a contract of a minimum of three years — with such a plant. HWAC — heavy trucks (13) A high-wage assembly credit of five percentage points may be included in the LVC for heavy trucks produced by a producer that operates a high-wage assembly plant for heavy truck parts or has a long-term supply contract — a contract with a minimum of three years — for those parts with such a plant. Minimum number of parts (14) A high-wage assembly plant for passenger vehicle or light truck parts or for heavy truck parts need only have the capacity to produce the minimum amount of parts specified in the definitions of those terms in section 12. There is no need to maintain or provide records or other documents that certify such parts are originating, as long as information demonstrating the capacity to pro