The U.S. subsidiary of the taxpayer, in turn, owned seven U.S. resident corporations five of whom had exempt deficits and two of whom had exempt surpluses. The trial judge found that the taxpayer was required to deduct the exempt deficits in computing its safe income for purposes of subsection 55(2). Before remitting the matter back to the Tax Court to hear evidence as to whether any factors reduced the safe income on hand, Linden J.A. stated (at p. 5260):
"The literature ... unanimously accepts that section 55(2) requires a calculation of safe income on hand, not exempt income generally ... . It is by definition a net calculation which begins with the deemed income in the section 55(5), but which does not end there." [See also Brelco Drilling Ltd. v. The Queen, 2000 DTC 1482 (TCC).]