A new development fund has been created for southwestern Ontario over the objections of the Progressive Conservatives.

The bill to create the fund passed in the legislature by a vote of 55-32, with the Tories opposing.

It will also make an existing fund for eastern Ontario permanent, four years after it was established.

Opposition Leader Tim Hudak says the province can't keep throwing money at its problems when it's facing a $15-billion deficit.

Economic Development Minister Brad Duguid says the funds will create jobs in those regions, which were hit hard by the global recession.

He says he shares the disappointment of some municipalities that the Conservatives voted against the bill.