François Thériault, 54, a site supervisor with the city, appeared before the Charbonneau commission in November and denied earlier testimony by former construction boss Lino Zambito that he benefited from a kickback scheme involving inflated contracts and pay outs from construction entrepreneurs.
Thériault told the commission that the only perks he saw were the occasional pair of hockey tickets or bottles of wine.
Not long after he testified, commission investigators asked the Sûreté du Québec to open their own investigation into Thériault's claims.
Quebec provincial police now allege Thériault did in fact see financial benefits from his position with the city, including a discount on his Laval home.
Police arrested Thériault Thursday at his residence, which was also searched by investigators.
Witnesses testifying before the commission can be granted immunity from prosecution for any admissions made in their testimony.
The SQ highlighted that this arrest does not affect that immunity agreement, but that the charge is related to allegations of lying in sworn testimony.
Thériault was one of three city employees explicitly named in Zambito's testimony. All three were later suspended while the city conducted an internal investigation.