Gilles Surprenant is seen here with the commission's previous witness, Lino Zambito. (SQ)

A retired city engineer who allegedly skimmed one per cent off the top of rigged contracts began testifying at Quebec's corruption inquiry on Thursday.

Gilles Surprenant took the stand at the Charbonneau Commission after eight days of headline-grabbing testimony by ex-construction boss Lino Zambito.

Zambito alleged that Surprenant, a chief city planner for many years who prepared plans and budgets for public works projects, skimmed one per cent for himself on certain contracts.

Zambito testified that Surprenant claimed a so-called "TPS" — the name being a tongue-in-cheek twist on the French-language acronym for the federal sales tax, the GST. Zambito said "TPS" stood for 'Taxe Pour Surprenant' (Tax for Surprenant).

None of Zambito's allegations have been proven in court.

Zambito testified that the kickback was paid in cash directly to Surprenant in various locations and without any witnesses present.

He estimated that over the span of a decade, his company alone paid Surprenant between $100,000 and $200,000.

Zambito also said Surprenant and other municipal officials were lavished with gifts — including a few Mexican holidays. They were also frequently invited to golfing excursions and fancy dinners.

Surprenant retired in 2009, his departure coinciding with the creation of a Quebec provincial police anti-corruption squad.

Zambito testified that many city engineers and bureaucrats retired after the Quebec government created the so-called Hammer squad, which was tasked mainly with investigating municipal corruption cases.

Quebec's corruption inquiry heard explosive testimony from Zambito that certain companies, including his own, operated as a cartel and colluded on certain contracts to drive up the cost of contracts.

Various cuts were paid out on those rigged deals with a 2.5 per cent commission going to the Italian Mafia.

He also said that, in 2005, he began paying the equivalent of three per cent in kickbacks to the governing municipal party in Montreal, in addition to other bribes and arrangements with various city engineers and bureaucrats.

And Zambito said the illicit practices extended to provincial contracts and contracts in other municipalities in Quebec. Notably, he testified he'd been made aware that a 2.5 per cent cut of contracts in Laval, north of Montreal, went directly to that city's mayor.

Zambito also admitted to illegally funding political parties at the provincial level, using the names of friends and families to circumvent donation rules.

The inquiry has said it will not explore whether such wrongdoing occurred at the federal level.