Mae West once said, “I have always felt a gift diamond shines so much better than one you buy for yourself,” but the gift finance minister Greg Sorbara delivered in his budget gleams about as bright as a cubic zirconium.

His diamond mine tax that increases the royalty rate from five per cent to 13 per cent still has us scratching the surface for answers as to why the De Beers’ Victor site near Attawapiskat is getting kicked in the crown jewels when it is contributing so much to the Ontario - and Northern - economy.

Diamonds are a unique commodity. Unlike oil, gas or other minerals, those glistening rocks are non-fungible. So as a result, diamonds are marketed and sold on the basis of their unique characteristics - clarity, colour, cut and carat weight. Companies always face some degree of subjectivity in international markets.

De Beers faces that challenge, as diamond prices have not kept pace with key metals, only increasing 35 per cent since 2002 as compared to more than 400 per cent for copper and zinc and nearly 200 per cent for gold.

Throw in Sorbara’s announcement and the company is essentially being penalized for the type of mineral it specializes in with a an increase of more than double that of other mine types.

The royalty hike has prompted municipal and business officials throughout the North to express their disapproval over the hike. Mayor Tom Laughren visited Queen’s Park last week justly arguing to the province’s Standing Committee of Finance and Economic Affairs that the royalty was unfair to the province’s only diamond mine.

“To triple their taxes less than one year from the opening of their mine is not fair,” he said. “They should be treated the same as any other mine that wants to develop in our region, regardless if it’s diamonds, copper or gold.”

Perhaps Sorbara has been so distracted by those glistening stones that it threw off his memory, neglecting Premier Dalton McGuinty’s comments at the June 19, 2006 ground-breaking ceremony at the Victor mine when he said “Ontario mining tax rate for new remote mines is five per cent compared to 10 per cent for non-remote mines. Remote mines are defined as mines located more than 30 kilometres from an all-weather road or railway.”

The last time we checked a map, Attawapiskat wasn’t exactly a hop, skip or jump from the 401.

De Beers has remained relatively quiet since the announcement until Friday when president Jim Gowans made a presentation to the Standing Committee. Gowans noted that his company originally launched exploration in Ontario because they believed in the province’s predictable fiscal environment.

But Sorbara’s hike has essentially moved the royalty from a corporate tax to a mine-specific tax.

“Ontario is already an expensive jurisdiction to operate” said Gowans. “There are better fiscal and regulatory environments in B.C. and Quebec.”

De Beers is making a near $1-billion investment in the North. Diamond mining in ideal conditions requires advanced exploration, but add in the remoteness of Attawapiskat and costs escalate.

To add even further costs to one mine is unfairly penalizing the Victor mine and Northern Ontario. The province has flipped on its long-term trend of reducing royalty rates, especially for remote mines.

As De Beers says, a diamond is forever - but let’s hope this royalty tax hike isn’t.