Found this on the government of Ontario's website:
Where do the revenues for the PVT go? Can residents expect new/enhanced services?
The PVT was developed to address City funding shortfalls and help raise additional revenues required to maintain and enhance services and programs benefiting city residents and businesses.
The vehicle tax is not directly applied to any one program. However, it is helping fund increases in capital expenditures in the roads/transportation area, which by 2011 will consume all the new PVT revenues.
Hey, it sounds like we're going to benefit from this tax!