Phillips was promoted to the rank of Major-General and sent to Quebec in 1776, along with his friends General Henry Clinton and General John Burgoyne, to be the commander of all artillery in the province. Governor Sir Guy Carleton put him in charge of the shipyard at St. John's where, along with Captain Sir Charles Douglas, he supervised the building of the small fleet of ships that fought the Americans under Benedict Arnold at the Battle of Valcour Island. He later took part in the recapture of Fort Ticonderoga, where he stated, "Where a goat can go, a man can go. And where a man can go, he can drag a gun."