Paolo Catania, owner of the Catcan construction firm, and former city supervisor François Thériault are facing several charges including conspiracy, fraud and breach of trust.
A story uncovered by Radio-Canada, CBC's French service, last year found Paolo Catania received a $5 million sewer contract from the city of Montreal, with the help of Thériault.
According to Radio-Canada, Catania reciprocated by brokering the purchase of a new house in Laval for Thériault, at $30,000 below market value.
Thériault, 54, has already testified before Quebec's corruption inquiry, where he admitted to receiving bottles of wine and hockey tickets as gifts from contractors, but neglected to mention the discount on his house.
That omission led to his arrest in December on charges of perjury and obstruction of justice.
Catania, as well as Thériault, have been released from police custody and are scheduled to appear in court on May 1.
A warrant has also been issued for the arrest of Antonio Catania, Paolo's father.