Investigators with the province's anti-corruption unit (UPAC) allege Lavoie used his position to ensure public building projects were developed and built by family members or business partners.
A spokeswoman for the mayor said Friday afternoon she had not yet spoken to Lavoie, but did not expect him to step down.
"We are fine with keeping his duties," Cynthia Ménard said.
St-Rémi Coun. Joseph Boire said he was surprised by the mayor's arrest.
"It's easy to make accusations," Boire said, "but unless there's proof of his guilt, he's innocent."
UPAC alleges the mayor had zoning regulations changed and rigged bids to ensure the contracts went to those companies.
Lavoie's son, real estate agent Sébastien Lavoie, and contractor Dominic Dorais were also arrested. Criminal charges were also laid against the company Construction Dominic Dorais.
The three are to appear in Longueuil court to face a total of 17 charges in March 2013.
Michel Lavoie, elected in 2005, is the second Quebec mayor to be arrested by the anti-corruption unit this year.
Richard Marcotte, former mayor of Maschouche, was arrested in a large sweep last April that also included Quebec construction magnate Tony Accurso.
In 2011, the former mayor of Boisbriand, Que., Sylvie St-Jean, was charged in connection with a corruption scandal that allegedly spanned between 2003 and 2009.
Those cases are still working their way through the courts.
Charges linked to building of fire station, seniors' home
Michel Lavoie was among the subjects of an investigation by Operation Hammer, the provincial police squad responsible for investigating fraud and white-collar crime, in Saint-Rémi in 2010.
The investigation focused on the construction of a fire station and a residence for seniors in the municipality.
UPAC's spokeswoman confirmed Friday morning that the criminal charges are also connected to those projects.
Saint-Rémi, a town of about 7,000, is about 30 kilometres south of Montreal.