On the heels of its announcement to put the construction of new nuclear reactors on hold, Dalton McGuinty has announced plans to subsidize electric cars.

The Ontario government has announced rebates of up to $10,000 to people who buy plug-in hybrid and battery-electric vehicles after July 1, 2010.”Ontario’s target is to become a world leader in building and driving electric cars,” Premier Dalton McGuinty said Wednesday.

Mr. McGuinty said his government aims to have one out of every 20 vehicles driven in Ontario electrically powered by 2020.

Toyota, which makes the popular hybrid is understandably upset:

Toyota Motor Corp. is raising concerns over the Ontario government’s plan to offer rebates of up to $10,000 to people who buy plug-in hybrid and battery electric vehicles, saying the move looks like a deliberate ploy to help General Motors Co. — of which the provincial and federal governments are now minority shareholders.

Auto industry analyst Dennis DesRosiers concurs:

“A cynic would say this is just government subsidizing a product that is produced by a company they own. I think that is a bit too cynical. I just think it is bad policy from a variety of perspectives.”

Reverse Reaganism at work. And people wonder why Ontario is in decline.