The significance of the ghost story about Lady Sorrel d'Orsey might relate to the omnipresence of war or the idea of hope and life.

Lady Sorrel d'Orsey had a romantic partner, the Earl of Bath, who was "dreadfully wounded in the Civil Wars" and "hidden" in the room where Robert stays. Lady Sorrel nursed the Earl and lit candles even after he died. One way to talk about the significance of this story relates to how it brings Robert's story into a broader context. By including the tale, Timothy Findley places Robert (and Taffler) beside previous men who had been injured in wars and required care. The story shows that war has been haunting civilization throughout history. The story is also significant because it sets up a key plot point. Think about how the ghost story propels Juliet to dress up as the ghost and then witness the indelicate sex between Barbara and Robert.

As for the candles, it’s possible to argue that they represent the idea of care or hope. Lady Sorrel keeps the candles lit even after the Earl dies. Juliet concludes Lady Sorrel lit the candles so the Earl "won't perish." Before Robert departs, Juliet gives him a candle as if to say she will keep him in her thoughts and hope that he lives. The candles seem to symbolize a dire hope for survival in a world where death is common.