Laval Mayor Gilles Vaillancourt is being accused of having given $10,000 cash to a former Parti Québécois fundraiser during the 1994 election campaign.
The allegations come in the final days of an election campaign in which questions of corruption have been at the forefront.
The allegation is included in a formal statement given by Claude Vallée last summer to Operation Hammer, a commission created in 2009 to investigate matters of collusion and corruption in the construction industry, according to a report by the Radio-Canada program Enquête.
According to the statement, Vallée, who raised money for PQ candidates on Montreal's north shore, gave the money to Michel Goyer, a former PQ organizer for Vimont Laval candidate David Cliche.
Contacted by Radio-Canada on the phone, Vallée declined an interview and refused to confirm or deny having received the money from Vaillancourt.
Goyer and Cliche both deny having been offered the money.
This is not the first time Vaillancourt is accused of having offered envelopes of cash during an election campaign.
In November 2010, both former PQ minister Serge Ménard and Liberal MNA Vincent Auclair accused Vaillancourt of having offered them money.
"I remember pink bills, purple bills and also $100 bills," Ménard told Radio-Canada at the time.
Vaillancourt later threatened to sue Ménard and Auclair over the allegations.
At the time, Daniel Lefèbvre, a former associate and friend of Vallée, said that other people including Vallée had received cash sums from the Laval mayor.
"As far as I'm concerned, the Ménard and Auclair cases are not unique. I am inclined to believe the people who told me so at the time and still today, said Lefèbvre.
Vaillancourt is denying the allegations.
"I've never done what Mr. Vallée says I did," Vaillancourt told Radio-Canada.
No accusations have been laid in this matter.
Hours after the Radio-Canada report aired, Vaillancourt's office sent out statement responding to the allegations.
In it, Vaillancourt calls them "false and without basis."
"They have no credibility," Vaillancourt said.
"This story is completely bizarre. I want things to be clear and simple: I have nothing to feel guilty about. I want to remind the people of Laval thatthe trust they have in me is of the upmost importance and that it is and will always be deserved."
Vaillancourt also took the unusual step of releasing a video to share his views on the allegations.
Vaillancourt responds to allegations (in French)