SURELY IT'S A BIT BIZARRE that Sylvia Jones joined with other members of the Progressive Conservative caucus in the Ontario legislature in opposing the McGuinty government's bill implementing a harmonized sales tax (HST) as of next July 1.

After all, the harmonization was pushed on the Ontario Liberals by the Tories' federal cousins, the Harper government having even gone so far as to give Queen's Park $4.3 billion that McGuinty & Co. have converted into a temporary income tax cut in hopes of making the levy less unpopular.

The legislation that will result in higher costs on about one in five items currently not subject to the 8% provincial sales tax (PST) has caused critics to term it a "$3-billion tax grab."

Without a doubt, this and other "tax grabs" are going to be required to pull the Province out of the deepest deficits in history, since even a robust economy won't produce a balanced budget in the face of soaring health-care costs without unpalatable cuts in provincial services.

Unpopular as it is among consumers, the HST is favoured by economists as assisting job creation and making the province more competitive. The four Atlantic provinces have implemented their own HST and British Columbia is planning a similar move.

The range of items previously untouched by the PST — gasoline, home heating oil, vitamins, domestic air travel and Christmas trees, for example — will be taxed. To ease the pain, the province is giving tax cuts, credits and exemptions, plus a onetime $1,000 payment for most families.

The federal Liberals say they'll support the Conservatives in passing separate legislation that provides for the harmonization and the $4.3-billion transfer to Ontario.

Perhaps the most unpalatable part of the HST will be its imposition on vehicle fuels on top of existing federal and provincial taxes. For some reason, neither level of government has been content simply to have a single tax per unit of consumption that won't increase along with retail prices.

But as we see it, the current situation, with deficits being racked up by governments at all levels, ought to produce the first round of tax reforms since those in the 1960s that led to imposition in 1972 of a capital gains tax, among other measures.

Interestingly, last week brought yet another example of how absurd and unfair our tax system has become.

In an open letter to the federal government, non-profit organizations pleaded for a change in income-tax laws that would make it easier for philanthropists to donate private company shares and real estate to charities.

"The government has the opportunity to unlock significant additional amounts of private wealth for public good," said the letter signed by Toronto Mayor David Miller and 26 heads of universities, hospitals, cultural organizations and other charitable groups that was published as an advertisement.

The letter urges the federal government to introduce amendments to the Income Tax Act in the upcoming budget that would eliminate the capital gains tax on gifts of private company shares and taxable real estate.

"This would remove a major barrier to charitable giving," said the letter, noting that the changes would bring Canadian tax law in line with what is already allowed in the United States.

One of the signatories, Terrence Sullivan, president and CEO of Cancer Care Ontario, told the Toronto Star that anything that allowed charitable foundations "to do a better job of receiving gifts on behalf of cancer patients is something we're in favour of."

It certainly strikes us as intolerable that a capital gains tax which is already unfair, to the extent that it makes no allowance for inflation between the time of purchase and sale, should apply to a charitable donation.

And it's particularly odious at a time when million-dollar lottery wins in Canada bring no taxation whatsoever by any level of government.

With an Ontario election due in October 2011 and a federal election possible anytime, this would be the perfect moment for the Harper Conservatives and/or the McGuinty Liberals to call a royal commission with a mandate to recommend the fairest and best form of taxation that would also allow our three levels of government to maintain their current levels of service.

Such an inquiry would hear the arguments for and against more or less reliance on income taxes, sales taxes, property taxes and user fees.

Undoubtedly, the trend in recent years has been toward relying less on income taxes and more on user fees, one reason being that income taxes become more and more visible as one's income increases.

Higher user fees, on the other hand, often aren't announced in budget speeches and seldom are based on any rationale such as a general inflation rate or documented costs. As one example, camping fees in provincial parks have more than doubled in the last decade without any significant expansion of campgrounds.

At a time when tax cuts are impossible, tax reform is surely an acceptable alternative.