Preheat oven to 350°F (180°C). Spread bread on baking sheet; bake in preheated oven until golden, 12 to 15 min. Set aside to cool.
Whisk milk, eggs, sugar, cinnamon and vanilla in bowl until well blended. Place bread and walnuts in greased 9-inch (2.5 L) square baking dish. Pour in egg mixture; toss to coat. Let stand for 15 min., stirring halfway through to soak bread completely. Smooth top; bake until golden and set, about 30 min.
Vanilla Caramel Sauce
Meanwhile, stir together sugar, water and cinnamon stick in a medium saucepan. Simmer over medium heat until mixture is a light caramel colour, about 20 min. Remove from heat immediately.
Working quickly, discard cinnamon stick; whisk in cream and vanilla. Stir in walnuts and salt.
Drizzle hot caramel sauce over warm bread pudding to serve.
To create a gluten-free bread pudding, the raisin bread can be substituted with 6 cups (1.5 L) of a sweet gluten-free artisan bread variety.
Making caramel sauce requires a watchful eye, as sugar tends to burn easily, going from golden and sweet to dark and bitter in an instant. Our recipe uses water to start the caramel, which slows down the cooking process of the sugar, making it easier to control. Keep the sauce at a simmer, and pay close attention to its colour once you reach the 20-minute mark.