In the year 1759 the Bishop of Bamberga Adam Seinsheim , due to unsustainable arbitrary taxes exacted by the empire, transfers all the possessions of the Signory of Federaun to Empress Maria Theresa of Austria . The temporal power of the Bavarian bishop princes and the spiritual power of the Patriarchs of Aquileia puts a stop to all interference in Val Canale. Ethnic stabilisation in the area goes back to this period . Most of the Italian-speaking population moves beyond Pontebba, where, starting from 1420 under the rule of the Serenissima Republic of Venice, they are partially assimilated. The German population is concentrated at Tarvisio, Raibl (Cave del Predil), Fusine (Weissenfels), Malborghetto, Lussnizza, Pontafel; the Slovene population remains where it is in the villages of Camporosso, Valbruna, Ugovizza, San Leopoldo. Even the economic situation changes. The wars sustained by Maria Theresa impoverish the treasury and the people. Compared with Val Canale other trade routes through the Alps are exploited to a greater extent by merchants. The slow relentless crisis of the Republic of the Doges makes itself felt and they start trading less and less with Northern Europe. Trade on the ancient road of Val Canale progressively diminishes.
Then come the Napoleonic wars that bring numerous marching enemy armies along the valley which clash on the territory. Following a brief period under the Provinces of Illyria , which are part of the Napoleonic reign in Italy, in 1815 Val Canale returns to Austria.