I was down at the HMCS Fredericton when it was there last week... however, I stupidly didn't take my camera. Amazing views over the Pier 27 site from there.
^ I would imagine that excavating on a site that once was part of the lake, and continues to lie right next to it, is something that presents its challenges.
I think you're right, they are working on both phase 1 & phase 2. And also because as MetroMan posted, they're excavating what was once part of the lake.